Public sector closes 2015 with a primary deficit of R$ 111.2 billion

Feb 5, 2016 by admin    No Comments    Posted under: Economy

The consolidated public sector closed 2015 with a primary deficit of R$ 111.249 bill. or 1.88 % of GDP. In 2014, the deficit was 0.57 % of GDP. Two consecutive years of primary deficit represent precedent in the Central Bank series that started in 2001.

In December, the deficit was R$ 71,729 bill. out of which R$ 61,763 bill. was a deficit of the Central Government and R$ 9,966 bill. of single states of Federation, municipalities and state enterprises. The worst result for the month ever recorded in the statistics. In November, the negative result was R$ 19,567 bill. while in December 2014 it was R$ 12,894 bill. The results of the month and of the year were worse than expected by analysts.

The year 2015 began with a promise of the former finance minister, Joaquim Levy, to save R$ 66.3 bill. or 1.13 % of GDP. However, in July, this goal was abandoned, due to the loss of revenues and a more difficult economic environment than anticipated. The surplus target decreased to R$ 8.7 bill. or 0.15 % of GDP. In the end, the Congress authorized the Government to make a deficit up to R$ 115.8 bill. accommodating the so called “back peddling” in the amount of R$ 55 bill. (Back peddling are accounting tricks that break the budget law and allow to spend more, i.e. to “generate” an extra revenue to meet the Government’s primary budget target goal, through running up debt with the state banks to hide a growing budget gap)

For 2016, the goal is to achieve a surplus of R$ 30.5 bill. or 0.5 % of GDP, but the distrust of achieving this goal is huge, since the result is related to the approval of the CPMF (tax on bank account transaction).

The figures presented by the Central Bank refer to the fiscal performance of the Federation, single states, municipalities, state enterprises, except of Petrobras and Eletrobras and except of the state owned banks.

The overall Government budget, which includes also the interest payments, recorded a deficit in the amount of R$ 613.035 bill. in 2015, or an equivalent of 10.34 % of GDP, again a new record in the statistics of the Central Bank. Only in December of that year, the deficit was R$ 123,821 bill.

Debt

The gross debt of the Brazilian public sector increased to R$ 3,927 trillion in December 2015, after achieving R$ 3,844 trillion a month earlier. In relation to GDP, the gross debt rose from 65.1 % to 66.2 % of GDP, a new record of the series that started in 2006. In 2014, the gross debt represented 57.2 % of GDP.

In December 2015, the net debt achieved R$ 2,136 trillion, or 36 % of GDP, the highest percentage for the year closing since 2008, after achieving R$ 2,027 trillion in November, or 34.3 % of GDP. In 2014, the ratio of net debt to GDP was 33.1 %.

Source: www.valoronline.com.br