A report by the Ministries of Finance and Planning points to inflation at 5.58% and a primary deficit of R$ 136.2 billion.| Photo: Marcelo Andrade/Gazeta do Povo / archive

The Ministries of Planning and Finance raised the inflation expectation this year from 5.31% to 5.58% and increased the government’s primary deficit to R$ 136.2 billion, according to a report presented this Monday (22) .

The projection points to an increase of R$ 28.6 billion in the gap in public accounts compared to the report presented two months ago, and will reach the equivalent of 1.3% of the Gross Domestic Product (GDP).

With that, the portfolios indicated the need to block BRL 1.7 billion in discretionary expenses (investments or funding) to be able to meet the spending ceiling, against an estimated gap of BRL 13.6 billion in March. The details of the ministries affected by the contingency will be released by the end of the month.

With the new estimates, the fiscal target for the year was adjusted from R$ 234 billion to a deficit of R$ 238 billion (2.2% of GDP), which Minister Fernando Haddad intends to reduce by around R$ 100 billion with revenue recomposition measures and expenditure cuts.

On the other hand, the government raised the GDP growth estimate from 1.61% to 1.91% for the year.