Brazil's fiscal balance deteriorated significantly over first five months

In the first five months of the year the accumulated fiscal deficit has risen to -BRL173.4bn as against -BRL70.1bn over the same period last year. However, the fiscal balance deteriorated more sharply in H2 last year as the country moved closer to the general elections and the government is not seen following a similar fiscal path in H2 this year. 

A spending freeze of BRL69bn announced in May should also help in this regard. As a result, there remains a possibility that the fiscal balance will not deteriorate to the same extent over the next seven months of the year. Having said that, the fiscal situation has already turned precarious enough to rule out any hope of a satisfactory result this year.