Brazilian public accounts show notable shift in first four months of Lula’s administration

In the initial four months of Lula’s administration, Brazil’s public accounts displayed a notable shift compared to the same timeframe during the last year of Bolsonaro’s government.

According to Central Bank data, the consolidated public sector accounts recorded a primary surplus of R$78.7 (US$16) billion from January to April 2023.

This represents a 47% decrease compared to the same period in the previous year when the positive balance was R$148.5 billion.

This data encompasses the accounts of the federal government, states, municipalities, and state-owned companies.

The forecast for the public accounts at the end of the year is evolving rapidly.

The Ministry of Planning and Budget and the Ministry of Finance released a revised deficit estimate for the balance sheet 2023 at the end of May.

Accounts are projected to shift from a surplus to a primary deficit of R$136.2 billion by the end of the year.

The previous projection made in March predicted a deficit of R$ 107.6 billion.

This information was disclosed in the revenue and expenditure report for the second two-month period of 2023. This document is published every two months.

Despite this change, the Federal Congress has already authorized the government to end the year with a public accounts deficit of approximately R$230 billion.

Meanwhile, in April, the consolidated public sector’s gross debt reached 73.2% of the Gross Domestic Product (GDP), showing a rise of 0.2 percentage points in the month.

The International Monetary Fund (IMF) predicts that Brazil’s gross public debt will end in 2023 at 88.4% of GDP, increasing over the next five years to reach 96.2% by 2028.

The level of public debt is one of the most significant national accounting figures, as it signals the sustainability of the country’s public accounts to both Brazilian and international investors.

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