Brazil’s fiscal deficit through September 2021 falls 68.7% from 2020, represents only 4.37% of GDP

RIO DE JANEIRO, BRAZIL – Brazil recorded in the first nine months of the year an accumulated nominal deficit of R$277.793 billion (about US$49.429 billion), equivalent to 4.37% of the gross domestic product (GDP), the Central Bank informed this Friday.

The result of the public accounts in the first three quarters of the year represents a drop of 68.7% compared to the negative balance recorded between January and September 2020, when it was R$888.522 billion (US$158.1 billion) and was equivalent to 16.32% of the GDP.

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In the last 12 months ended in September, the nominal deficit of the public sector, resulting from the difference between revenues and expenditures, was R$404.649 billion (US$72 billion), or 4.84% of GDP, compared to 6.82% recorded in the interannual up to August of this year.

Likewise, in September alone, Brazil recorded a nominal deficit in its public accounts of R$42.018 billion (US$7.476 billion), a lower value than the US$103.419 billion (US$18.401 billion) obtained in the same period of 2020.

The September result, however, was 41.2% higher than the R$29.739 billion (US$5.291 billion) recorded in August, which represented 4.17% of GDP.

Latin America’s largest economy closed 2020 with a nominal deficit equivalent to 13.6% of GDP, the worst result since 2001 and almost triple that recorded in 2019, due to increased spending to mitigate the economic effects of the Covid-19 pandemic.

According to the Central Bank, Brazil’s gross public debt of R$6.9 trillion (US$1.2 trillion) was equivalent to 83% of GDP on September 30, a slight increase of 0.3 percentage points compared to that at the end of August.

The debt ratio, which serves as a benchmark for rating agencies, is still considered high, although it is far from the record levels of 2020 when it exceeded 90% of GDP.