Brazil 2016 Budget Shortfall to Be 130 Billion Reais: Folha

Brazil faces a budget shortfall of about 130 billion reais ($36 billion) for 2016, after the government cut its growth forecast for next year to less than 0.5 percent from an estimate of 1.3 percent made in April, the Folha de S.Paulo newspaper reported.

The government reduced its estimate for revenues by 60 billion reais due to the worsening of Brazil’s economic outlook, Folha reported. It cited lawmaker Ricardo Barros, who drafted the proposals. Meanwhile, compulsory expenses, including spending on social security and civil servants’ payrolls, increased by about 80 billion reais. The shortfall has been reduced by 10 billion reais, partly due to changes in non-compulsory expenses.

Barros estimated that the reintroduction of the so-called CPMF tax on financial transactions, which is being considered by the government, would raise 60 billion reais, as well as some additional revenue for states and cities, according to Folha. The government also expects 35 billion reais of extraordinary revenue in 2016 from a program to repatriate undeclared funds from outside Brazil, Folha said, citing the lawmaker.