Brazil: public accounts have a surplus of US$19 billion in January says Central Bank

The primary result of the consolidated public sector had a surplus of R$99 billion (US$19 billion) in January, according to data released on Tuesday (28) by the Central Bank (BC).

In January, the surplus was R$101.8 billion.

According to the financial statistics report published by the agency, the Central Government and the regional governments recorded respective surpluses of R$79.4 billion and R$21.8 billion, and state companies, a deficit of R$2.2 billion in January.

In the 12-month period that ended in January, the consolidated public sector reported a R$123.2 billion surplus, the equivalent of 1.24% of GDP.

“The nominal interest of the consolidated public sector, appropriated by competence, totaled R$52.3 billion in January 2023, compared to R$17.8 billion in January 2022. This increase resulted from the currency swap operations (a R$31.9 billion gain in January 2022 and R$16.1 billion in January 2023) and the increase in the Selic rate in the period,” points out the publication.

In the 12-month period, nominal interest rates reached R$621 billion (6.26% of GDP) in January 2023, compared to R$425.7 billion (4.76% of GDP) in the 12-month period until January 2022.

PUBLIC DEBT REACHES 73.1% OF GDP

In January, the net public sector debt reached 56.6% of GDP (R$5.6 trillion), shrinking 0.9 percentage points of GDP in the month.

According to the Central Bank, this result reflected:

• the impact of the primary surplus (reduction of 1.0 p.p.),
• the effect of the variation in the nominal GDP (reduction of 0.5 p.p.),
• the variation in the parity of the basket of currencies that make up the net external debt (reduction of 0.3 p.p.),
• the 2.3% currency appreciation (an increase of 0.3 p.p.),
• and the appropriate nominal interest (an increase of 0.5 p.p.).

The Gross General Government Debt (GGDB) – which comprises the Federal Government, INSS, and state and municipal governments – reached 73.1% of the GDP (R$7.3 trillion) in January 2023, a reduction of 0.3 percentage points of the GDP of the previous month.

According to the report, this evolution in the month was mainly due to the effect of the following:

• nominal GDP variation (reduction of 0.6 p.p.),
• net debt redemptions (reduction of 0.3 p.p.),
• the exchange rate appreciation (reduction of 0.1 p.p.),
• and appropriate nominal interest (an increase of 0.7 p.p.).

With information from Gazeta do Povo