Brazil's fiscal numbers will be watched carefully

Brazil's fiscal data for June is expected to release on Friday. Recent efforts to improve the primary balance could result in better numbers in H2, but the limitations on revenue growth continue to cast a shadow on that prospect. Moreover, the lost ground is unlikely to be completely recovered. 

Therefore, Societe Generale estimates the country's fiscal balance to be at -6.2% of GDP. Moreover, there remains upside risk to interest rates and, therefore, to the interest payments on existing debt. As a result, the medium-term fiscal outlook remains very bad.