Itaú BBA - Primary deficit of BRL 15.3 billion in November

Macro Brazil

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Primary deficit of BRL 15.3 billion in November

diciembre 30, 2019

The consolidated primary deficit over 12 months receded to 1.2% of GDP from 1.3% in the previous month.


For the version with all charts and tables, please open the attached pdf file

 

  The consolidated public sector posted a primary deficit of BRL 15.3 billion in November, which was better than our forecast and market consensus (-16.2 billion and -16.4 billion, respectively). The central government experienced a deficit of BRL 16.5 billion under the National Treasury’s methodology (which considers the gap between revenues and expenses), which was wider than our -14.6 billion estimate. Under the Central Bank’s methodology (contemplating just the change in the central government’s net debt), the deficit stood at BRL 18.2 billion. Regional governments posted a primary surplus of BRL 2.9 billion, while state-owned companies showed a deficit of BRL 39 million. The consolidated primary deficit over 12 months receded to 1.2% of GDP from 1.3% in the previous month.

 The general government’s gross debt increased to 77.7% of GDP in November from 77.3% in October, while the net debt narrowed to 54.8% of GDP from 55.2%. Over 12 months, the nominal deficit excluding FX swap transactions remained at 6.1% of GDP. Following the approval of the pension reform, the focus must remain on revising mandatory expenses, such as personnel spending, in order to consolidate a scenario of gradual return to primary surpluses that are compatible with structural stabilization in public debt.

 

Pedro Schneider
André C. B. Matcin


For the version with all charts and tables, please open the attached pdf file



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