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Rousseff says Brazil will try to get out of first budget deficit
[BRASÍLIA] After presenting Brazil's first ever budget deficit, President Dilma Rousseff promised on Wednesday that her government will work hard to get back in the black.
"We are being straightforward. And we are showing, clearly, that there is a problem," she said at a news briefing.
Ms Rousseff's government delivered the proposed budget to Congress Monday predicting a primary deficit amounting to 0.5 per cent of GDP, or 30.5 billion reais (S$11.9 billion).
This was the first time a Brazilian government has unveiled a plan that would mean government spending outstrips revenue.
The news follows last week's prediction that Brazil has just entered its worst recession since 1931 and a host of other downbeat economic news, coupled with political turmoil.
A primary budget reflects the government's ability to manage savings and debt. The worry for Brazil now is that its debt load will lead to a loss of its investment-grade credit rating, which would be a serious blow to the economy.
"We want to meet the goal that we set," Ms Rousseff told reporters. "So we are going to get that deficit down." Amid the tough economic climate, inflation also is high at 9.56 per cent and unemployment has risen to 7.5 per cent.
Ms Rousseff's popularity, with the economy so weak and major corruption scandals swirling, has skidded to single digits.
Brazil saw boom years peaking with 7.5 per cent economic growth in 2010. But Latin America's biggest country - the host of next year's Summer Olympics - has been brought down by plunging commodity prices and political instability.