Brazil’s Bolsonaro government achieves highest surplus in 6 years in October

Brazil’s Bolsonaro government posted a surplus of R$30.8 (US$5.8) billion in October. This was the highest primary result for the month since 2016.

The National Treasury released the report this Tuesday (Nov. 29).

The primary result is formed by revenues (such as tax collection) against expenditures. It does not account for interest payments on the debt.

The primary result for the month was above market projections, which indicated a positive balance of R$28 billion in October.

When compared to October 2021, there was a real increase (above inflation) of 1.6%. In the same period last year, the surplus was R$28.48 billion.

From January to October 2022, the surplus was R$ 85.7 billion, corresponding to 1.02% of the GDP (Gross Domestic Product).

In 12 months, the accounts had a real positive balance of R$ 85.73 billion, the highest value since 2013.

PUBLIC DEBT

The Treasury said that it is likely that the gross debt will approach 74% of GDP (Gross Domestic Product) in December 2022, similar to the level observed at the end of 2019, before the Covid-19 pandemic.

He stated that the result is expressive and that it “differentiates the country” from the trend observed in major global economies.

“IMF data project that emerging countries should end the year with the GGDB reaching, on average, about 65.1% of GDP, a figure 10.6 pp higher than that recorded in 2019 (54.5% of GDP),” the report stated.

The Treasury pondered that despite the improvement, Brazil’s debt would still be about 9 percentage points above the projected average for emerging countries.

“It is important that the country continues in its fiscal consolidation effort, especially in a global conjuncture in which lower growth and higher interest rates are expected in the coming years, a combination that will require a greater contribution of primary accounts to the sustainability of public debt,” it said.

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