RIO DE JANEIRO, BRAZIL – The primary deficit is the negative result of the government’s accounts, by calculating revenues minus expenses, disregarding the payment of interest on public debt.
According to the Treasury Secretariat, the improvedd result in relation to August 2018 was mainly due to the R$5 billion (US$1.25 billion) reduction in total expenditures in real terms (discounting inflation). On the other hand, net revenue decreased by R$1.5 billion, due to a R$7 billion decrease in concessions and permits, partially offset by an increase of R$4.6 billion in income tax.
From January to August, the Central Government recorded a primary deficit of R$52.124 billion, against R$58.739 billion over the same period last year. This was the best result for this accumulated period since 2015 (R$17.381 billion).
The secretariat reported that the reduction in the accumulated primary deficit in the year resulted from the reduction in discretionary (non-compulsory) expenses, which in 2019 were R$13.2 billion lower than in the same period in 2018 and the increase in net revenues, which increased by R$1 billion.
On the other hand, there was a redemption of shares in the Fiscal Investment and Stabilization Fund in May and June 2018 in the amount of R$4 billion, which has not been repeated this year.
In the 12 month period ending in August, the primary deficit reached R$115.220 billion (real values, i.e., discounting inflation), corresponding to 1.61 percent of the Gross Domestic Product (GDP), the sum of all goods and services produced in the country. For this year, the government’s target is a primary deficit of R$139 billion, representing 1.94 percent of GDP.
Source: Agência Brasil