Latest news with #RogerioCeron
Reuters
5 days ago
- Business
- Reuters
Brazil economic team to present alternative to tax hike, no defined solution so far
SAO PAULO/BRASILIA, May 29 (Reuters) - Brazil's government has agreed to present an alternative plan to the increase in the IOF tax on financial transactions in 10 days, lower house speaker Hugo Motta said on Thursday in a post on X. The controversial measure signed last week by President Luiz Inacio Lula da Silva to raise revenue, and thereby limit an already substantial spending freeze aimed at meeting this year's fiscal rules, triggered intense backlash after it immediately drove up the cost of credit for companies, contributions to pension funds and some foreign exchange operations. Treasury Secretary Rogerio Ceron said at a press conference that there is still no defined solution and that discussions are yet to take place. Ceron stressed, nonetheless, that without the IOF hike, "we have a very complex situation" in which to fund vital public policies. "(Congress') desire is to create a more definitive solution," Ceron said, adding that there is now a sense of openness to structural discussions with lawmakers who, in the past, might not have been willing to engage. Lula's leftist administration has repeatedly emphasized its focus on rebalancing public accounts by eliminating tax distortions and what it sees as unjustified tax benefits, rather than cutting spending, which has notably increased since he took office. However, several measures aimed at curbing tax expenditures sent to Congress have either been significantly watered down or have not even begun moving through the legislative process. Motta earlier said that the Brazilian Congress is likely to overturn the government proposal to increase the tax on financial transactions if a legislative decree on the matter reaches the voting agenda. "The mood in both (congressional) houses is to overturn the measure," he told news outlet G1. Congress is willing to discuss reforms, Motta told G1, adding that he believes the government has resorted to maneuvers to increase revenue. "There is exhaustion in the Congress with measures that increase taxes, aim to raise revenue without structural discussion," he said.
Reuters
5 days ago
- Business
- Reuters
Brazil's central government posts higher-than-expected primary surplus in April
SAO PAULO, May 29 (Reuters) - Brazil's central government recorded a primary budget surplus of 17.8 billion reais ($3.1 billion) in April, Treasury data showed on Thursday, above the 15.9-billion-real surplus projected by economists polled by Reuters. The figure represents an increase from the 11.6-billion-real surplus in the same period of last year, driven by higher tax collection, as well as a jump in revenues coming from dividends and the exploration of natural resources, specially oil. Year-to-date, the central government primary surplus reached 72.4 billion reais, more than double the 31.8-billion-real surplus posted a year earlier. The improvement has been helped by a favorable base effect, as the government chose to push a hefty bill for court-ordered payments to the second half of the year, whereas those payments were made in the first half in 2024. In the 12-month period, the primary deficit stood at 5.3 billion reais, or 0.02% of gross domestic product (GDP). Speaking at a press conference, Treasury Secretary Rogerio Ceron said the central government will probably post a 12-month primary surplus in May. The government targets a zero primary deficit this year, with a tolerance margin of 0.25% of GDP, meaning it can record a deficit of up to 31 billion reais and still comply with fiscal rules. ($1 = 5.6574 reais)
Reuters
06-05-2025
- Business
- Reuters
Brazil's treasury secretary suggests raising spending limit in 2027
SAO PAULO, May 6 (Reuters) - The spending limit established by Brazil's fiscal framework should be raised from 2027 to incorporate the excess of court-ordered payments, Treasury Secretary Rogerio Ceron said on Tuesday. Ceron said that there was still no government decision on the matter, but that an eventual expansion should be limited to the amount necessary for those payments, not allowing for other additional expenses. The Reuters Tariff Watch newsletter is your daily guide to the latest global trade and tariff news. Sign up here. The court-ordered payments are seen ranging from 30 billion to 40 billion reais ($5.25-6.99 billion). "Given the level of court-ordered payments, which is not coming down, maybe the country will not be able to resolve this in the short term," he said. Brazil's Supreme Court allowed part of the payments to be paid outside of the fiscal framework until 2026, but from 2027 they will again be included in the spending limit, with the government already anticipating a squeeze on public accounts. This year, the Brazilian government should pay 70 billion reais in court-ordered debt in July, an amount that Ceron considers should not pressure inflation. He also said that Brazil is committed to its fiscal rules but reforms are necessary to ensure they are preserved. A recent drop in commodity prices, as well as a stronger Brazilian currency, affect the country's tax revenues, he added.
Reuters
04-02-2025
- Business
- Reuters
Brazil 2025 public debt seen rising by double-digits, rate-linked bonds soar
BRASILIA, Feb 4 (Reuters) - Brazil's Treasury on Tuesday estimated that federal public debt will rise up to 16% this year, as bonds linked to the benchmark interest rate potentially exceed half of total debt, exposing them to the central bank's aggressive push to tame inflation and making it costlier for the country to service its debts. The Treasury's annual financing plan sees debt ranging from 8.1 trillion reais to 8.5 trillion reais ($1.47 trillion) in 2025, up from the 7.316 trillion reais recorded in December. It also stressed the continued strategy of issuing conventional and sustainable bonds to provide a reference for the Brazilian sovereign yield curve, adding it "may use external liability management operations to enhance the efficiency of the yield curve." The Treasury estimated that the share of debt linked to the benchmark Selic interest rate will account for 48% to 52% of the total this year, after rising to 46.3% in 2024. These floating-rate bonds, known as LFTs, reached their highest share in 20 years last year, amid intense volatility from shifting interest rate expectations in the U.S. and concerns over Brazil's growing indebtedness. According to Treasury Secretary Rogerio Ceron, the strategy of increasing the share of floating-rate bonds aligns with market appetite. "There is no point in working against market demand," he said at the press conference. Such securities are typically more appealing to investors during periods of heightened risk perception but leave debt costs vulnerable to sharp increases when interest rates go up. Last week, Brazil's central bank raised rates by 100 basis points to reach 13.25% while signaling a matching hike in March to curb inflation. Prices in Latin America's largest economy are currently pressured by robust economic activity and a weaker currency amid lingering fiscal woes and a challenging global backdrop. Each rate increase is immediately passed on to servicing costs of almost half of Brazil's hefty debt burden. The gross debt of the South American nation closed 2024 at 76.1% of gross domestic product (GDP), a level deemed high among emerging market peers. The Treasury maintained its long-term goal of reducing the share of LFTs in total debt to 23% by 2035, but Daniel Leal, the Treasury's deputy secretary for public debt, said that reaching this optimal level within a ten-year horizon may not be feasible. "This may take a little longer," he said, adding he did not believe the increased share of these bonds in total debt was hindering the transmission of monetary policy. Leal also highlighted that the Treasury began the year with a much more balanced debt management approach, noting that January auctions were "quite successful," with volumes significantly higher than those seen immediately before. ($1 = 5.7669 reais)
