Brazil’s government on Tuesday reduced its forecasts for both GDP growth and inflation this year while freeing up R$2 billion in frozen government funds. The actions were announced as part of a regular bi-monthly monitoring report on the government budget. In the report, the government acknowledged that economic growth has not been as robust as earlier expected. The government cut its GDP growth forecast from the previous 2.97% to 2.5%. But the government also cut its inflation forecast, this time to 3.11% for 2018 from a previous forecast of 3.64%. The government freed up R$2 billion in frozen funds, noting that tax revenues have been higher than expected. Some R$9.1 billion in 2018 budget funds remain frozen, however. The government routinely freezes and then frees up appropriations as part of a strategy to meet annual budget targets. This year’s target is a primary deficit no higher than R$159 billion. It may be difficult for the government to free up additional funds, however. The report acknowledged that the planned privatization of electric power utilities holding company Eletrobras may have to be postponed until 2019. The privatization depends on congressional authorization. Congress has been slow to give its consideration to the measure.
Link to government news agency releaseMore Testimonials