May 1, 2020 / 4:44 PM / a month ago

Brazil ups forecast for COVID-19 emergency measures to $64 bln

SAO PAULO, May 1 (Reuters) - The Brazilian government’s emergency measures to fight the coronavirus-fueled health and economic crises will have a 349.4 billion reais ($63.7 billion) impact on this year’s primary budget balance, the Economy Ministry said on Friday.

That is up from the estimated 285.4 billion reais impact from two weeks ago, reflecting the prospect of increased spending and a steeper decline in tax revenues.

Emergency outlays, including cash transfers to workers and to companies to help pay salaries, will come to 333.4 billion reais, the ministry said in a presentation published on Friday.

It also estimated a 16 billion reais drop in tax revenue this year.

Assuming the economy shrinks by 3.3% this year, according to the consensus forecast in the central bank’s weekly “FOCUS” survey of economists, the fiscal impact will be the equivalent of 4.81% of gross domestic product, the ministry said. ($1 = 5.4858 reais) (Reporting by Ana Mano; editing by Jonathan Oatis)

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