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RIO DE JANEIRO, Nov. 22 (Xinhua) -- Brazil's southernmost state Rio Grande do Sul declared a financial emergency on Tuesday, as South America's biggest economy is struggling to fix its fiscal problems.
The declaration was published on Tuesday's edition of the state's official journal. The state government attributed the move to the "severe crisis of the Brazilian economy," which is affecting the government's capacity for financing.
In addition, according to the decree, the accumulated fall of the local gross domestic product (GDP) in 2015 and 2016 is expected to reach 7 percent, with "tragic consequences for the tax collection."
The state decided to declare an emergency in order to tackle the crisis and allow the state government to take exceptional measures in handling its budget. However, essential services such as healthcare and public education will continue to be provided.
Brazilian states and municipalities are facing financial problems. Earlier this year, Rio de Janeiro state declared a similar emergency so it could ensure funds to support the August Olympics.
