UPDATE 2-Brazil worsens forecast for 2024 public accounts, but still within fiscal target

(Adds comments from government officials in paragraphs 4 and 9, details in paragraphs 8 and 9-11)

BRASILIA, March 22 (Reuters) - Brazil's government projected on Friday that it will end 2024 with a deficit of 9.3 billion reais ($1.9 billion), worse than its budget bill projection of a slight surplus, but still in line with its fiscal target.

The revision was noted in the bi-monthly revenue and expenditure report jointly prepared by the planning and finance ministries, marking at least a partial victory for the economic team.

At the end of last year, many were expecting the fiscal target to be loosened to accommodate higher spending after leftist President Luiz Inacio Lula da Silva said that there was no need to meet the goal given the importance of financing priority projects.

"Measures so far are sufficient for us to achieve what we promised," said Deputy Treasury Secretary Viviane Vargas, adding that the government remains vigilant.

The new deficit estimated by the government comes on the back of a 16.8 billion reais decrease in projected net revenues for the year, coupled with a 1.6 billion reais rise in expenses.

The 9.3 billion reais primary deficit corresponds to 0.1% of the gross domestic product, while the target for this year is 0% of GDP shortfall, with a tolerance margin of 0.25 percentage points of GDP in either direction.

However, private economists remain distant from the government's calculations, foreseeing a primary deficit of 0.75% of GDP, according to a central bank's weekly survey.

The factors that most contributed to a downward revision of revenues were lower tax collection, despite the monthly records announced in January and February, and reduced revenue from oil royalties, concessions and permissions.

Speaking to reporters, Finance Minister Fernando Haddad said the government was adopting a "cautious" stance.

In the report, the government also reduced the expected revenue intake from the change in taxation of offshore funds and the anticipated gains from a significant rule approved last year to narrow how state fiscal benefits could reduce companies' taxable income base for federal purposes.

It also nullified estimates previously made for the increase in federal taxation on e-commerce orders up to $50, and with changes to "interest on equity" (JCP) payments, which currently allow companies to deduct shareholder remuneration from their corporate tax obligations.

Initially, the government aimed to raise 10.5 billion reais this year by eliminating JCP, but Congress retained the instrument with specific changes to its applicability.

The government estimated in the report the need to block 2.9 billion reais in expenses this year to comply with the spending cap outlined in its new fiscal rules.

Under the framework approved by Lula, in addition to a primary fiscal target, the government has to adhere to a growth in expenses capped at 70% of any increase in revenue, but constrained to a minimum expansion of 0.6% and a maximum of 2.5% above inflation. ($1 = 4.9975 reais) (Reporting by Marcela Ayres; Editing by Steven Grattan and Marguerita Choy)