Brazil’s Supreme Court approves spending on drought and wildfire relief, despite missing fiscal target
Brazil’s Supreme Court has granted authorization for the government to exclude expenses related to wildfires and droughts in the Amazon and Pantanal regions from this year’s fiscal target. The decision by Justice Flavio Dino paves the way for the government to implement extraordinary measures to address the situation by submitting an executive order to Congress.
The current drought in Brazil is the most severe and widespread since 1950, exacerbated by various factors such as a weak rainy season, rising temperatures, and land-use changes. Record wildfires have been devastating the Amazon and Pantanal regions, affecting navigation on the Amazon’s waterways and disrupting agriculture in key grain-producing areas.
Furthermore, Justice Dino has allowed the government to expedite the hiring of temporary firefighters and allocated resources to prioritize investigations into wildfires. This follows earlier exemptions for spending on unprecedented floods in Rio Grande do Sul, which have totaled billions of reais this year.
While the ruling allows for increased expenses without impacting the fiscal target, it will contribute to Brazil’s already high public debt. The country’s financial burden from climate events continues to grow, highlighting the need for swift action to address environmental challenges.
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Emma Collins, graduated in Financial Economics from the University of Chicago in the USA in 2016. She has since worked at an asset management firm in New York, where she specializes in investment strategies and portfolio management. Emma has a keen interest in financial analysis and has published several articles in renowned financial journals. Her work focuses on providing actionable insights to investors, and she is known for her forward-thinking approach to managing financial portfolios.