Brazil's budget sinks deeper into red

Brazil's government accounts headed deeper into the red last month, according to figures released Tuesday, fueling worries over the ailing health of the world's seventh largest economy.

The South American giant posted a primary budget deficit of 19.6 billion reais ($5.1 billion) in November, up sharply from $3 billion in October, the central bank said.

The gap between the government's spending and revenues, excluding interest payments on loans, now amounts to 0.89 percent of GDP in the 12 months through November, it said.

Brazil is struggling through a deep recession and a political crisis that has led to impeachment proceedings against embattled leftist President Dilma Rousseff.

The government expects the economy to contract 3.1 percent this year and 1.9 percent next year.

Congress authorized a budget deficit of up to two percent of GDP this year as the government tries to kick-start the economy.

But it has set a target of a 0.5-percent surplus for next year, after a political battle that led to the resignation of finance minister Joaquim Levy. He had insisted the goal needed to be even higher to get the government's books in order.

Brazil's financial troubles have led ratings agencies Standard & Poor's and Fitch to downgrade its credit rating from investment grade to junk.