Brasília – This Monday (29th), the Brazilian minister of Finance, Guido Mantega, announced that the primary surplus target for the Central Government (National Treasury, Social Security and the Central Bank) will be raised from approximately 81.8 billion reals (US$ 50.8 billion) to roughly 91 billion reals (US$ 56.5 billion) this year. The measure is part of a set of government actions to address the ongoing international economic crisis.
“The federal government’s share is approximately 81 billion reals. I am announcing an upward revision of the primary [surplus] to 91 billion reals for 2011. That is, an increase of [nearly] 10 billion reals in our primary surplus in 2011,” he said. The announcement was made at a press conference at the Ministry of Finance, after a Political Council meeting at Palácio do Planalto (Palace of the Highlands), where the presidential cabinet is located. The government had been signalling that it would alter the fiscal policy.
In the seven months of this year, the consolidated public sector primary surplus reached 91.979 billion reals (US$ 57.1 billion), as against 43.588 billion reals (US$ 27.1 billion) from January to July 2010. Thus, 78% of the target for this year has been met, at 117.9 billion reals (US$ 73.3 billion). The Central Government recorded a surplus of 66.307 billion reals (US$ 41.2 billion), state governments contributed 21.711 billion reals (US$ 13.5 billion) and municipal governments contributed 2.050 billion reals (US$ 1.2 billion). State-owned companies have contributed 1.911 billion reals (US$ 1.2 billion).
Economic growth was also taken into consideration in the government’s decision. Last Tuesday (23rd), at a hearing in the Federal Senate, minister Guido Mantega admitted that the growth rate should no longer be 4.5%, as the government had estimated, but rather 4%. The government also rules out the raising of all Brazilian public servants’ wages this year and in 2012.
*Translated by Gabriel Pomerancblum
