Primary deficit to be narrower than expected

Brazil’s National Treasury secretary Mansueto de Almeida said the deficit should end the year at 1% of GDP, a narrower rate than the previously forecasted 1.8%.

Agência Brasil

Rio de Janeiro – Brazil is expected to post a primary deficit of BRL 70 billion to BRL 80 billion (USD 17-19.5 billion), which is less than the government’s earlier target of BRL 132 billion (USD 32 billion), National Treasury secretary Mansueto de Almeida Junior (pictured) said this Friday (8) during the Brazil Risk Reassessment seminar at Fundação Getulio Vargas (FGV) in Rio de Janeiro.

Mansueto imputed the result to adjustments in state-run companies and the non-completion of tax recovery agreements with insolvent states, since the public sector comprises the federal, state and local governments and state-run companies. Another factor was the lowering of Brazil’s benchmark Selic rate to 5%.

“The primary deficit was expected to be about 1.8% of Gross Domestic Product (GDP). We are ending the year with a primary deficit of around 1% of GDP,” the secretary said. “We have some great news when it comes to interest, because the interest paid by the public sector is plummeting. This is great from a fiscal standpoint, because since Brazil’s debt is short, it shows up very quickly in the debt financing. In the next 12 months, 20% of the debt will mature and will be refinanced at lower interest rates,” he added.

Translated by Gabriel Pomerancblum

Fabio Rodrigues Pozzebom/Agência Brasil

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