Moody’s forecasts primary deficit of 1.6% of GDP for Brazil and sees electoral risks
RIO DE JANEIRO, BRAZIL – After ending 2021 with a primary surplus of 0.7% of Gross Domestic Product (GDP), Brazil’s consolidated public sector accounts should go back into the red this year, according to Moody’s.
The agency predicts a primary deficit of 1.6% of GDP in 2022, given the expected slowdown in activity in the country.
“While the strong fiscal performance in 2021 will support Brazil’s credit profile, we expect the cost of debt to grow again in 2022 and the primary deficit to return because of low growth,” says Moody’s report.
The scenario considers a growth projection of 0.6% of the GDP for 2022, still above the median of the last Focus market report, of 0.3%.
With debt financing more expensive due to the country’s monetary tightening, Moody’s estimates that the nominal public sector deficit will advance from 4.4% of GDP in 2021 to 5.9% of GDP this year.
“Additionally, spending pressures on the eve of the October 2022 elections may negatively affect fiscal consolidation efforts,” warns the agency.
Live Market IntelligenceBrazil — Live Market Board
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Brazil — Live Market Board
+0.21%
174,951.12
+0.21%
66,644.91
+0.53%
11,375.68
-0.66%
3,044,628
+1.18%
2,507.12
-0.05%
60,449.35
+0.64%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 174,951.12 | +0.21% | +21.85% | 174,576.80 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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