Brazil’s Gross Debt-to-GDP Ratio Declines Unexpectedly in January

Brazil’s debt-to-GDP ratio fell to 75.3% in January, lower than expectations due to net debt redemptions and GDP growth. The public sector achieved a primary surplus of 104.096 billion reais, exceeding forecasts and resulting in a 12-month deficit of 0.38% of GDP.

In January, Brazil’s gross debt-to-GDP ratio unexpectedly declined, as reported by the central bank. The ratio dropped to 75.3% from 76.1% in December, outperforming the 76.2% expectations set by a Reuters poll of economists. This 0.8 percentage-point reduction is attributed to net debt redemptions and growth in nominal GDP.

Furthermore, Brazil’s public sector achieved a primary surplus of 104.096 billion reais (approximately $17.92 billion) for January, surpassing the 102.135 billion reais anticipated by economists surveyed by Reuters. This has resulted in a 12-month rolling deficit of 0.38% of GDP. Within this period, the central government recorded a deficit of 0.37% of GDP.

The decline in Brazil’s gross debt-to-GDP ratio and the achievement of a primary surplus in January signify positive fiscal developments. This trend suggests effective management of fiscal policy under the administration of President Luiz Inacio Lula da Silva, which aims for a balanced budget within the year.

Original Source: www.tradingview.com