Brazil Worst Budget Deficit Shows ‘Tougher Measures’ Needed

Brazil posted the biggest budget deficit in 2014 and the government is rolling out some tough measures to save this situation. Rousseff’s administration is raising taxes and cutting spending to narrow the deficit that is threatening the government’s investment grade status.

In addition, Standard & Poor’s in March last year downgraded Brazil’s credit rating to one level above junk, citing a slowdown in economic growth and deteriorating fiscal accounts. As a result, Rousseff’s government started an austerity program by reducing unemployment benefit costs and some pensions, capping the amount it can spend monthly and raising taxes on fuel, imports, personal loans and cosmetics as a way to ease the impact of the global crisis on jobs and income.

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