Coronavirus: Brazil's COVID-19-fighting economic measures only for 2020

Brazil does not have the capacity to announce huge fiscal packages to fight the coronavirus crisis and whatever it does deliver will only be for this year, a top Economy Ministry official said on Wednesday.

Economic Policy Secretary Adolfo Sachsida said a cautious approach must be applied to the government's spending decisions, and again warned that fiscal stability in coming years cannot be put at risk by overspending this year.

Brazil's government has proposed fiscal measures protecting the most vulnerable and safeguarding jobs amounting to about 180 billion reais ($36 billion), but virtually none of that comprises new spending.

Speaking online at a virtual event organized by Necton Investimentos, Sachsida said economic support will be offered in stages.

"It's difficult for us to make a big announcement. Other, richer countries have the luxury of unveiling grand plans and if they mess up, they have money. We don't," he said.

Rodrigo Maia, speaker of the lower house of Congress, this week proposed that Brazil should spend between 300 billion and 400 billion reais ($58-78 billion) in emergency funds, creating a "war budget" under which ordinary fiscal rules do not apply.

Meanwhile, Sachsida also said that the government has revised its 2020 primary budget deficit goal from its original target of 124 billion reais. Asked if it is now 200 billion reais, he said it is, "a little bit more, a little bit less."

The government last week cut its 2020 economic growth forecast to zero form 2.1%, owing to the anticipated hit to demand, supply and investment from the coronavirus shock.

Many private sector economists say the economy could contract significantly.