Brazil’s January Primary Budget Surplus Falls Short of Expectations

Brazil’s primary budget surplus for January stood at 84.9 billion reais, below the 88.5 billion reais forecast. This reflects a 3.7% increase in net revenues and a 4.4% rise in spending. The government aims to balance the budget for the year, allowing for a deficit of up to 31 billion reais.

Brazil’s central government reported a primary budget surplus for January that fell slightly short of market forecasts. According to Treasury data released on Thursday, the surplus amounted to 84.9 billion reais ($14.6 billion), which is below the anticipated 88.5 billion reais expected by economists surveyed by Reuters. However, this figure represents an improvement compared to the 79.5 billion reais surplus recorded during January of the previous year.

The primary surplus achieved was supported by a real increase of 3.7% in net revenues compared to the previous year, while expenditures increased by 4.4%. Over the past twelve months, the central government has reported a primary deficit of 42.2 billion reais, equating to 0.32% of the nation’s gross domestic product (GDP).

The government has set an official target for this fiscal year to balance the budget, allowing for a tolerance of 0.25% of GDP in either direction. This means that the government retains the capability to operate with a deficit not exceeding 31 billion reais, ensuring fiscal flexibility while aiming for overall budgetary balance.

Exchange Rate: ($1 = 5.8268 reais)

In summary, Brazil’s primary budget surplus for January was lower than expected yet showed year-over-year improvement. Despite slightly exceeding revenue growth, spending increased at a higher rate, thereby resulting in a primary surplus of 84.9 billion reais. The government’s fiscal goal remains focused on achieving a balanced budget while permitting a manageable deficit.

Original Source: www.marketscreener.com