Brazil’s public sector budget deficit edged up again in April, on a 12-month basis, hitting a record R$139.3 billion, up from R$136.0 billion as of March. For the month of April itself, the public sector produced a modest R$10.2 billion surplus, reversing a R$10.6 billion March deficit. But a low basis of comparison a year ago brought continued erosion to the government’s 12-month position. Congress recently elevated the 2016 deficit ceiling to a record R$170.5 billion, up from the previous ceiling of just R$24 billion. Given present trends, economists expect the actual deficit to close the year at between R$160 billion and R$165 billion. Finance Minister Henrique Meirelles has called debt and deficit reduction the government’s number one priority.
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