Brazil’s January Primary Budget Surplus Falls Short of Expectations

Brazil’s central government reported a primary budget surplus of 84.9 billion reais in January, falling short of market forecasts. While spending growth exceeded revenue gain, the surplus improved from the previous year’s figure. The government aims to balance the budget this year, allowing for a slight deficit.

In January, Brazil’s central government achieved a primary budget surplus of 84.9 billion reais ($14.6 billion), which was slightly less than the 88.5 billion reais anticipated by economists. This comes as inflation-adjusted spending growth surpassed revenue growth, according to official Treasury data. Despite falling short of expectations, the surplus improved compared to January of the previous year, which recorded a surplus of 79.5 billion reais.

The revenue for January saw a real increase of 3.7% year-over-year, while government expenditures increased by 4.4%. Over the past 12 months, the central government displayed a primary deficit of 42.2 billion reais, equivalent to 0.32% of the gross domestic product (GDP). The government has set an official target for the fiscal year to balance the budget, allowing a flexibility margin of 0.25% of GDP, which permits a deficit of up to 31 billion reais.

In summary, Brazil’s central government reported a primary budget surplus in January that did not meet market expectations, attributed largely to higher spending growth. Nonetheless, the figure reflected an improvement from the previous year, presenting a complex fiscal landscape as efforts continue towards budget balancing for the year ahead.

Original Source: www.marketscreener.com