Brasilia – The Brazilian Central Government primary surplus (Central Bank, National Treasury and Social Security) in 2013 reached approximately R$ 75 billion (US$ 31.5 billion, by current exchange rates), stated Finance Minister Guido Mantega this Friday (03). The primary surplus is the saving of resources to pay off interests of the public debt. The target set by the Government for 2013 was of R$ 73 billion (US$ 30.6 billion). Traditionally, the result is released by the National Treasury at the end of each month, but, this time, the minister anticipated the announcement.
Originally, the Budget Directives Act (LDO) established the surplus target at 3.1% of the federal, state and municipal GDP in 2013. Later, the government launched mechanisms that allowed for cost reductions with the Growth Acceleration Program (PAC) and revenues that didn’t come in due to exemptions, and revised the target to 2.3% of the GDP, that is R$ 110.9 billion (US$ 46.5 billion).
At the end of November, the National Congress approved an amendment to the LDO exempting the Federal Government from compensating target underachievement by state and municipal governments.
In November last year, there was a record public sector primary surplus, after a weak result in October. One of the contributing factors for a better result in November was allowing for special installment payments plans for banks, insurance companies and Brazilian multinationals, which renegotiated late taxes and drove up Government revenues.
The bonus paid for signing the Libra oil field bid, in Brazil’s pre salt layer, also helped drive the primary surplus.
*Translated by Silvia Lindsey