Brazil’s Primary Deficit Shrinks as Gross Debt Climbs to 78.5% of GDP
Brazil’s public sector recorded a primary deficit of R$21.4 billion ($3.93 billion) in August 2024, according to latest Central Bank data.
This figure marks an improvement from the R$22.8 billion ($4.18 billion) deficit seen in August 2023.
Over the past twelve months, the consolidated public sector has accumulated a deficit of R$256.3 billion ($47.03 billion).
This sum equates to 2.26% of Brazil’s GDP. The deficit shows a slight decrease of 0.03 percentage points compared to July’s twelve-month figure.
The Net Public Sector Debt reached 62.0% of GDP, totaling R$7.0 trillion ($1.28 trillion) in August.
This represents a 0.2 percentage point increase from the previous month. Several factors contributed to this rise in debt levels.
Nominal interest rates had the most significant impact, adding 0.6 percentage points to the debt.
The primary deficit contributed an additional 0.2 percentage points. Changes in nominal GDP reduced the debt by 0.4 percentage points.
Brazil’s Gross Debt, encompassing federal, state, and municipal governments, hit 78.5% of GDP in August.
This translates to R$8.9 trillion ($1.63 trillion), marking a 0.2 percentage point increase from July. Nominal interest rates played a major role in this increase.
The year-to-date increase in Gross Debt stands at 4.1 percentage points ($0.75 billion) of GDP. This rise stems from various factors affecting Brazil’s economic landscape.
Brazil’s Primary Deficit Shrinks as Gross Debt Climbs to 78.5% of GDP
Nominal interest incorporation added 5.1 percentage points ($0.97 billion) to the debt. Net debt issuance contributed 1.3 percentage points ($0.24 billion) to the increase.
Currency devaluation effects added 0.7 percentage points ($0.13 billion). However, nominal GDP growth offset some of this increase, reducing the debt by 3.1 percentage points ($0.57 billion).
These figures reflect Brazil’s ongoing efforts to manage its public finances amid economic challenges.
The slight reduction in the primary deficit suggests some progress in fiscal management. However, the rising debt levels indicate persistent economic pressures.
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