Brazilian government expects first primary surplus in nine years this year

The government announced today that Brazil could end the year with its first primary surplus in nine years (the result of federal government accounts that include the National Treasury, the Central Bank, and Social Security).

In July, Brazil’s national budget recorded a primary surplus of R$19.3 billion (US$3.775 billion), compared to a deficit of R$19.5 billion (US$3.815 billion) in the same month last year, the second best result for that month in the historical series after 2011.

Finance Ministry Secretary Paulo Valle told a press conference that the rise in oil prices, the privatization of state-owned Eletrobras, and tenders for private sector concessions led to positive results in July and for the year as a whole, meaning Brazil’s balance sheet is expected to be positive for the first time since 2013.

Between January and July, the state budget recorded a surplus of R$73.1 billion (US$14.305 billion), compared to a deficit of R$73.1 billion (US$14.305 billion) in the same period last year.

The primary surplus, introduced in the late 1990s, represents the saving of resources without considering the interest on the public debt.

Each year, the Budgetary Guidelines Law (LDO) establishes a primary surplus or deficit to be achieved by the federal government, local governments, and state-owned enterprises.