The fiscal crisis: what happened recently?

ABSTRACT This article updates the discussion of the fiscal situation of the central government in Brazil. It is shown that, between 1988 and 1995, the National Treasury revenues increased almost 3% of the GDP. Consequently, during 1990-1995, the central government exhibited a fiscal equilibrium, a better result than the average deficit of 2.8% of GDP observed in 1985-1989. Despite these numbers, some problems of the current situation of the fiscal accounts are highlighted and the increasing weight of the wages and Social Security expenditures, (a) which together jumped from 47% to 60% of the revenues between 1988 and 1995, (b) is pointed out as the most important reason for the budget constraint of the majority of the ministries.