The Brazilian Football Confederation also said in a statement it will support Colombia's bid against Japan and the joint candidacy of Australia and New Zealand. South America has never hosted the tournament. A decision is expected on June 25.
"Because of the fiscal and economic austerity brought on by the COVID-19 pandemic, [the government] thought it would not be recommended to right now sign the guarantees asked for by FIFA," the CBF said in a statement on Monday.
Brazil has hosted a string of international sporting competitions in recent years - including the World Cup in 2014, the Olympic Games in 2016 and the Copa America in 2019 -- and the CBF also felt they were outsiders to host yet another major event.
Brazil's economy is expected to contract this year by at least 7.4 percent, investment bank Goldman Sachs predicts.
The country is the hardest hit by COVID-19 in Latin America, with more than 37,000 confirmed deaths.