RIO DE JANEIRO, BRAZIL – Central government accounts posted a primary deficit of R$87.835 billion (US$17.567 billion) in July, the worst performance for the month since official records began in 1997.
The result includes the National Treasury, Social Security, and Central Bank accounts. In July 2019, the result was negative at R$5.934 billion.
Last month’s shortfall was lower than financial market projections, which averaged a deficit of R$94.35 billion, according to a Broadcast Projections survey of 20 financial institutions. Last month’s data was close to the estimates floor, which ranged from a deficit of R$184.95 billion to R$87.50 billion.
In July, revenues fell 20.2 percent over the same month last year. Expenditures climbed 44.9 percent in the same comparison, discounting inflation, due to the increase in spending to tackle the coronavirus pandemic.
In the accumulated figures for the first half of 2020, the primary result is negative by R$505,187 billion, also the worst performance since official records began. In relation to the same period in 2019, there is a 17.1 percent drop in revenues and a 45 percent increase in expenses in real terms.
In 12 months, the central government has posted a R$ 567.4 billion deficit – equivalent to 7.87 percent of GDP. The fiscal target for this year permitted a deficit of up to R$124 billion in the Central Government’s accounts, but Congress’ approval of the public calamity decree to address the novel coronavirus pandemic allows the government to miss this target in 2020. In 2019, the Central Government’s shortfall stood at R$95.065 billion.
Source: Estadão Conteúdo