BRASILIA, Dec.3 (Reuters) – The Brazilian government is recalculating its forecast for the 2022 primary fiscal balance due to an increase in expected tax revenue, two sources with direct knowledge of the matter told Reuters on Friday.

The Ministry of the Economy predicted in October that the government would post a primary deficit equivalent to 1.5% of gross domestic product in 2022. The new calculations indicate that the government will in fact post a primary deficit of 0.4% of GDP. , equivalent to 42 billion. reais ($ 7.43 billion), said the sources, who requested anonymity to discuss matters internal to the ministry.

According to the new calculations, the increase in tax revenue is expected to more than offset the additional spending the government will incur in changing the country’s constitutional spending cap this week, the sources added.

On Thursday, the Brazilian Senate approved a constitutional amendment proposed by the government of Brazilian President Jair Bolsonaro, which will increase social spending in 2022. read more

The government has released extremely high tax revenue figures in recent months, a trend that is expected to continue, the sources say.

They added that it is possible that the government’s current forecast of a 2021 primary deficit equal to 1.1% of GDP could be significantly changed due to the high tax figures.

Brazil’s economy ministry declined to comment when asked about the forecast changes on Friday evening.

($ 1 = 5.65 reais)

Report by Bernardo Caram; Writing by Gram Slattery Editing by Alistair Bell

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