Itaú BBA - Primary deficit of BRL 23.7 billion in March

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Primary deficit of BRL 23.7 billion in March

abril 30, 2020

Fiscal result will worsen in 2020


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

 

 The consolidated public sector posted a primary deficit of BRL 23.7 billion in March, which was close to market consensus (BRL 23.5 billion) and worse than our forecast (BRL 19.6 billion). The central government printed a deficit of BRL 21.2 billion under the National Treasury’s methodology (which considers the gap between revenues and expenses), better than our BRL 25 billion estimate. Regional governments posted a deficit of BRL 2.7 billion (vs. an anticipated surplus of BRL 1.5 billion), while state-owned companies delivered a BRL 0.4 billion surplus. The consolidated primary deficit over 12 months widened to 0.9% from 0.8% of GDP. 

 The general government’s gross debt climbed to 78.4% of GDP in March from 76.7% in February, while net debt fell to 51.7% of GDP from 53.6%, reflecting FX depreciation during the month. Over 12 months, the nominal deficit excluding swap transactions remained at 5.5% of GDP.  Contracting economic activity and measures implemented to cushion the impact of the coronavirus crisis will cause sharp deterioration in fiscal results in 2020, but it is vital not to create permanent expenses, so that the gradual fiscal adjustment enabled by the spending cap constitutional amendment can resume from 2021 onwards.

 

Pedro Schneider 


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



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