Acting Brazilian President Michel Temer will send Congress a detailed 2017 budget proposal later Friday including a projected R$143.1 billion primary deficit for the public sector. The budget will mark the fourth year in a row of primary deficits. The primary deficit in 2015 was R$111.2 billion. The projected 2016 deficit is R$170.5 billion. Finance Minister Henrique Meirelles said the deficit will decline in 2017 due to a combination of spending cuts and increased revenues from the sale of infrastructure concessions for projects such as railroads, highways and airports. He added, “Selected tax hikes will be included, if judged necessary.” Meirelles said details on concessions and taxes will be offered later in the year. He said the deficit will decline again in 2018 to a projected R$79 billion. The government projects a zero deficit for 2019. Brazil’s public accounts fell into deficit in 2014 after more than a decade of primary surpluses. Deficits began accumulating because of tax abatements offered to selected industries, inflation-plus hikes in social security and other benefits and, in 2016, a sharp falloff in tax collections due to a recessionary economy.
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