SÃO PAULO -- Brazil's government cut its forecast for economic growth and tax revenue for this year as President Jair Bolsonaro's administration struggled to get key economic legislation through Congress.
The nation's gross domestic product will expand 1.6% in 2019, Brazil's economy ministry said Wednesday, down from its March forecast of 2.2% growth. In 2018, GDP grew a disappointing 1.1%.
Brazil "is under strong financial stress," said Finance Secretary Waldery Rodrigues during a press conference in Brasília. The government, which last week faced protests against a previously announced freeze of part of the education budget, won't carry out more freezes, Mr. Rodrigues said.
One reason that the economy is growing more slowly is that many Brazilian businesses and investors have been waiting for the government to get a bill overhauling the country's insolvent pension system approved by lawmakers before committing to new hiring and investment plans.
The proposal, which would cut pension system outlays by about 1 trillion reais ($250 billion) over 10 years and calm concerns about budget deficits, faces fierce opposition from left-wing parties in Congress and has been held up by political haggling with parties that in theory support passage of the bill.
"People were hoping the pension bill would be approved in the first half, but it's starting to look like it won't be until the third or fourth quarter," said economist Daniel Xavier. "That uncertainty is affecting business decisions."
