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By Marcela Ayres
BRASILIA, July 8 (Reuters) - Brazil's government is set to slash its 2019 economic growth forecast, a senior Economy Ministry official said on Monday, warning that weak growth is putting pressure on government revenues and could force another budget freeze.
Waldery Rodrigues, special secretary to the Economy Ministry, said the new growth forecast, to be announced later this week, will likely be around 0.8%-1.2%, in line with market expectations but sharply down from the government's current 1.6% projection.
Earlier on Monday, the central bank's latest weekly "FOCUS" survey of economists showed growth expectations were lowered for the 19th week in a row, although there were signs that the gloom may be lifting.
Budget freezes could be unveiled in the next bimonthly fiscal report on July 22, Rodrigues said, adding that the government is looking at "various ways," including tax breaks, of limiting their impact.
"The signs are that we will have a budget freeze. We may be able to reduce or even avoid it, but it depends on our ability to come up with these measures," Rodrigues said at an event in Brasilia.
Rodrigues said slower economic growth than previously forecast is having a negative impact on government revenue. To that end, he said he will ask development bank BNDES to return 126 billion reais ($33 billion) of loans to government coffers this year.
Unless adequate steps are taken, Brazil's gross debt as a share of gross domestic product will surpass 80%, he warned, a worrying level that must be avoided. Debt to GDP reached a record 79.0% in April, but fell to 78.7% in May.
Rodrigues also said oil sector revenues from the so-called "transfer-of-rights" contract with state-run oil company Petroleo Brasileiro SA, known as Petrobras, could yield 52 billion reais for the central government and 21 billion reais for regional governments.
The government has a constitutional amendment on new "federative pact" rules for central and regional government revenues ready to go, Rodrigues said. Tax reform proposals are also close to being finalized and will be announced once pension reform is approved, he added. (Reporting by Marcela Ayres; Writing by Jamie McGeever; Editing by Dan Grebler)