Brazil’s federal tax collection fell in May to the lowest level for that month in seven years, raising concerns about the health of the country’s economic recovery as well as the government’s ability to meet its 2017 budget goal.
Revenues, after adjusting for inflation, fell to 97.694 billion reais ($29.55 billion) last month, down 0.96 percent from the year-earlier period, Brazil’s federal tax agency said on Tuesday.
Tax revenues in the first five months of the year totaled 544.485 billion reais, up 0.35 percent from the same period in 2016, the tax agency said.
Brazil’s economy has begun a slow recovery from a two-year recession, with market forecasts for growth of about 0.4 percent in 2017.
The government is counting on higher tax revenues and strict spending limits to meet a primary budget deficit goal of 139 billion reais for this year. Hitting that target is seen by investors and ratings agencies as a crucial step in ensuring Brazil’s debt sustainability in the long run.