Brazil's Treasury Forecasts Multibillion Primary Deficit in 2024

Facts

Brazilian Treasury Secretary Rogerio Ceron told a press conference on Tuesday that the country's federal government is set to record a primary deficit of R$20B, or more than $3.3B, this year, meeting the fiscal target of zero deficit with a margin of 0.25% of gross domestic product (GDP).^[1]
This comes as late last month the government announced a tightening in spending to comply with fiscal rules and revised its primary deficit forecast to R$28.7B, roughly $4.8B at the current exchange rate.^[2]^[3]
Meanwhile, data from the Organization for Economic Co-operation and Development (OCDE) published on Wednesday indicates that the primary deficit is likely to be as high as 0.6% of GDP in 2024 even with a projected real growth of 3.2%, amid fiscal expansion.^[4]
According to data from Brazil's central bank, the central government has accumulated a primary deficit of R$66.4B from January to October 2024. Year-on-year, the primary deficit is at $232.9B.^[3]
Last week, Brazil's currency — the real — dropped to a nominal all-time low, below the six-per US dollar threshold, as government plans to cut spending by R$70B, or $12B, over the next two years failed to calm market concerns.^[5]^[6]

Narrative A, as provided by The Rio Times. With a remarkable surplus in October and an expected strong finish to the year, Brazil is set to meet fiscal targets this year as the government has focused on increasing its revenues through taxes and slashing expenditures in an effort to maintain economic stability.
Narrative B, as provided by Deloitte Insights. Though the Brazilian economy is outperforming expectations, government finances remain a matter of concern. Initially planned for next year, a primary surplus is now planned only for 2026 — and many expect that to occur only in 2029 amid fears that the government would run deficits within the tolerance margin.