Brazil’s economic growth and fiscal outlook this year are shaping up to be worse than official government forecasts, making a return to austerity and reforms next year all the more pressing, said Treasury Secretary Mansueto Almeida. He added that the public sector primary deficit this year excluding interest payments could reach R$800 billion ($152 billion), or more than 11% of gross domestic product, while the economy is set to shrink around 6-7%.
The tax reform, expected to be voted in August, could be a boost for “green recovery” in Brazil. Sustainable economy, clean energy and low carbon emissions have been a new paradigm hunted in some countries that have already surpassed the peak of the new coronavirus. For the coordinator of the environmental front, tax reform is one of the ways to redirect public resources to this change.
The cooling of the turbulence caused by the new coronavirus pandemic and the low salaries made the government’s debt rise for the first time in two months. The Federal Public Debt (DPF), which includes the federal government’s internal and external indebtedness, rose 2.17% in nominal terms in May compared to April. The stock rose to R$ 4.251 trillion ($ 800 bn).
The percentage represents 11.6 million hectares of public forests “appropriated” over 21 years (1997-2018). Totally, the Amazon has 49.8 million hectares of unallocated forests. The consequence of the lack of destination of these areas is the invasion of crickets and the increase in deforestation and burning.
As competitiveness worsens in Argentina, Brazil, Mexico and Colombia, the International Monetary Fund (IMF) has revised down its outlook for economic growth in Latin America’s top economies this year. The IMF now expects Brazil, the region’s top economy, to suffer a 9.1% decline. In April, the fund had predicted a 5.3 % decline.
International investors are not properly informed about Brazil’s actions for the development of environmentally sustainable activities, said Brazil’s Central Bank President. The green bond market in Brazil amounts to $1.5 billion, which, according to the Central Bank, is very little compared to a global market of over $400 billion.