Cut to Brazil budget target hits markets

Joe Leahy – Financial Times, 7/22/2015

Brazil has slashed its estimates for balancing its budget this year, sending markets lower amid fears the move could place its prized investment grade rating at risk.

The country’s economic team announced on Wednesday night that it was reducing its 2015 target for the primary fiscal surplus, the budget balance before interest payments, from 1.2 per cent of gross domestic product to just 0.15 per cent.

“Tax revenue is lower than what was expected,” said Nelson Barbosa, planning minister, blaming the country’s deepening recession.

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