Brazil’s public sector in July posted a primary budget deficit of R$16.1 billion, pushing the 12-month deficit to R$170.5 billion, the Central Bank said Wednesday. The rolling, 12-month deficit is now far behind target. The government’s initial target for calendar 2017 was a deficit no larger than R$139 billion. Earlier this month, the government asked Congress to raise the deficit target to R$159 billion. A key congressional committee voted Tuesday to approve the new limit. It must now be voted by the full Chamber of Deputies and the full Senate. Failure to meet the target could lead to major budget sequesters later in the year. Budget targets have been hurt by lower-than-expected tax revenues this year and by fixed costs such as retirement benefits.
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