Brazil deficit much worse than thought: minister

[BRASÍLIA] Brazil's projected budget deficit for this year will be nearly twice as big as forecast when Dilma Rousseff was president, the new finance minister said Friday.

Ms Rousseff's government vastly overestimated tax revenues from an economy in deep recession, minister Henrique Meirelles told a press conference.

Ms Rousseff's government had calculated the primary deficit - the government's deficit excluding debt payments - at 96 billion reais (S$37.3 billion). But the figure is more likely to be around 164 billion reais, Mr Meirelles said.

"The target is set with realistic parameters," the minister said of the new projection.

Brazil, just a few years ago the fast-growing poster child of developing economies, is mired in acute recession and now headed for its third straight year of deficit spending.

Mr Meirelles said the deficit estimate does not take into account economic reform measures that are under consideration, such as renegotiating the terms of debt owned by Brazilian states.

Ms Rousseff was suspended from office last week and replaced by her vice president Michel Temer as acting president.

She faces an impeachment trial on charges of tweaking government accounts to make them look better as she sought re-election in 2014.

AFP