Brazil`s deficit jumps sharply as recession bites
December 30, 2015, 5:09 pm   

Brazil`s deficit jumped in November to one of the highest levels on record as state finances came under increasing strain amid a deep recession.

The public sector deficit - the difference between what the government spends and what it receives in revenues - rose to 19.6bn reais ($5.1bn).

This was worse than expected and much higher than October`s 11.5bn reais.

The government is struggling to increase tax revenues as the economy continues to shrink.

Between July and September, the economy contracted by 1.7% compared with the previous quarter, deepening the country`s worst recession in 25 years.

The economy has shrunk in all but one of the last six quarters.

Unemployment has risen sharply this year and now stands at 7.5%, putting a further strain on government finances.

Inflation is also running at more than 10%, undermining the value of Brazilians` savings and their ability to spend.

Brazil`s economy has been hit hard by a slowdown in global demand - particularly in China - for its commodities, while a corruption scandal centred on state oil giant Petrobras has severely damaged investor confidence.


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