Central government of Brazil saw worst semester since 1997Staff writer ▼ | August 1, 2015
From January to June, the Central Government (National Treasury, Social Security and Central Bank) registered a primary deficit of R$ 1.598 billion ($474.8 million).
Latam Primary deficit was $474.8 million
The primary deficit represents the negative results of the public accounts before payments of the public debt. In June, the Central Government registered an R$ 8.206 billion ($2.43 billion) deficit, also the worst result for the month in real values. Last month’s deficit cancelled out the primary surplus of R$ 6.626 billion ($1.96 billion) accumulated from January to May.
According to the National Treasury, the drop in revenues is the main cause for the negative performance. From January to June, net revenues declined 3.3% (inflation-adjusted). Total spending, however, remained stable, increasing 0.5%.
The difficulties in cutting spending and in increasing revenues made the economic team reduce to R$ 8.7 billion ($2.57 billion), 0.15% of the Gross Domestic Product (GDP), the target for the 2015 primary surplus, the savings to pay interest rates of the public debt. From this total, 0.10%, R$ 5.8 billion ($1.71 billion), is on the account of the Central Government.
For the total calculation of the public accounts, it’s necessary also to include the numbers from states, local governments, state-owned companies and other state institutions. ■