Key facts
- India may miss its budget deficit target for the first time since 2021.
- India's budget deficit may widen to 4.8% of GDP.
- Egypt's budget deficit reached EGP 1.12 trillion in July-April.
- Egypt's deficit represented 5.3% of GDP.
- Chile's Finance Ministry seeks an additional $6.2 billion in borrowing authority.
- Chile projects its debt-to-GDP ratio to breach 45.0% in 2028.
- Morocco's trade deficit expanded by 18.4% to MAD 127.0 billion in Jan-Apr.
- Qatar recorded a budget deficit of $2.8 billion in Q1.
- Serbia's Jan-April deficit was RSD 106.2 billion.
- Brazil increased its budget freeze by BRL 23.7 billion.
Multiple nations are grappling with widening budget deficits and fiscal challenges, influenced by a confluence of global economic pressures and geopolitical instability. India is likely to miss its budget deficit target for the first time since 2021, with the deficit potentially reaching 4.8% of GDP, an increase from the previously set 4.3% limit. This is primarily attributed to soaring energy import costs stemming from the Middle East crisis, which also poses potential credit risks to India's microfinance sector through monsoon and war uncertainties. Egypt's budget deficit expanded to EGP 1.12 trillion in July-April, representing 5.3% of GDP. This widening occurred despite a significant 29% rise in tax revenues and a 70% jump in non-tax revenue, largely from the Alam El Roum Project. However, a 22% surge in interest payments consumed 92% of tax revenues, contributing to the deficit.
Chile's Finance Ministry is requesting an additional $6.2 billion in borrowing authority to address a higher deficit and exchange rate effects. The government has also revised its fiscal deficit and debt forecasts upward for 2026-2030, projecting the debt-to-GDP ratio to exceed 45.0% in 2028. Morocco's trade deficit widened by 18.4% year-on-year to MAD 127.0 billion in January-April, driven by strong import growth in capital goods, consumer items, and energy. While automotive and aeronautics exports showed robust performance, weaker shipments of phosphates and textiles limited overall export growth. Qatar recorded a budget deficit of $2.8 billion in the first quarter, marking its fifth consecutive quarterly shortfall, with total revenues falling 23% year-over-year, a situation attributed to the conflict in Iran.
Serbia's central government budget recorded a deficit of RSD 1.7 billion in April, contributing to a cumulative January-April deficit of RSD 106.2 billion, which was RSD 86.5 billion below the planned budget. Although revenues increased by 10.3% year-on-year, expenditures rose by a larger 12.1%. Brazil's government has increased its budget freeze by BRL 23.7 billion to manage rising mandatory spending on welfare and social security. Despite this, the government forecasts a BRL 4.1 billion primary surplus in 2026, supported by higher revenue projections from elevated energy prices. Israel's Finance Ministry has released updated three-year fiscal projections, indicating an improved deficit outlook due to increased revenue forecasts and slight spending cuts, though defense and interest spending are anticipated to increase their share of the budget.