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Brazilian gov't admits to deficit in 2016 federal budget

Xinhua, September 1, 2015 Adjust font size:

The Brazilian government sent a proposal to the Congress Monday for the 2016 federal budget, which foresees a deficit of 30.5 billion reais (8.4 billion U.S. dollars).

The amount is equivalent to 0.5 percent of the country's gross domestic product (GDP).

Also, the proposal estimates an inflation rate of 5.4 percent for 2016, surpassing the 4.5 percent inflation target but remaining below the 6.5 percent upper limit of the target, as well as a GDP growth rate of 0.2 percent.

Planning and Budget Minister Nelson Barbosa said the government will keep working on improving the public accounts through new concessions to the public sector and tax hikes.

Meanwhile, the government itself is also downsizing, for example by proceeding with plans to reduce the number of ministries and other cabinet offices. There are 39 offices at the moment.

"We know where we want to go, and we know how we will get there: through reforms, through making Brazil fairer and more efficient," Finance Minister Joaquim Levy said.

Vice President Michel Temer said that by admitting the deficit, the government is not trying to "put on make-up" on the budget. Endi