Brasília – The Brazilian consolidated public sector – including federal, state and municipal governments and state-owned companies – posted, in May, the worst primary result for May since the beginning of the historic series, in December 2001. It was the first time ever the public sector posted a primary deficit in May, with a negative US$ 5.01 billion (or R$ 11,046 billion). In the same period in 2013, the public sector posted a primary surplus of US$ 2.576 billion (or R$ 5,681 billion).
The head of the Economic Department of the Brazilian Central Bank (BC), Tulio Maciel, said government invested more in May and there was a reduction of dividends and judicial bonds in relation to the same month last year.
As regards the other months, the result in May is also the worst since December 2008, when the primary deficit reached US$ 9.50 billion (or R$ 20.952 billion). Primary result is savings to pay interests on public debt.
Year-to-date through May, the primary surplus amounted to US$ 14.27 billion (or R$ 31,481 billion), while the same period in 2013 posted US$ 21.19 billion (or R$ 46.729 billion). In the 12-month period ended May, primary surplus of the public sector stood at US$ 34.49 billion (or R$ 76.057 billion) the equivalent to 1.52% of the Gross Domestic Product (GDP), the sum of all goods and services produced in the country.
Maciel said it is still too early to evaluate if the public sector will have a hard time reaching the surplus target of 1.9% GDP in the year.
“We need to wait for the next results. There are many events yet to take place, such as the revenue generated by concessions, dividend forecast at the Annual Budget Law (LOA), the Brazilian federal government’s program for instalment payments of outstanding tax debts (Refis). An evaluation requires a wider array of data. We cannot have this evaluation based on the last result [May’s],” he argued.
*Translated by Rodrigo Mendonça
