Itaú BBA - Primary surplus of BRL 56.3 billion in January

Macro Brazil

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Primary surplus of BRL 56.3 billion in January

febrero 28, 2020

Largest primary surplus for the month


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 The consolidated public sector posted a primary surplus of BRL 56.3 billion in January, printing between our forecast (BRL 60 billion) and market consensus (BRL 54.8 billion). The central government had a surplus of BRL 44.1 billion according to the National Treasury’s methodology (which considers the difference between revenues and expenditure), close to our BRL 44.8 billion estimate. Regional governments posted a BRL 10.1 billion surplus, while state-owned companies showed a surplus of BRL 0.7 billion. The consolidated primary deficit over 12 months narrowed to 0.7% of GDP, from 0.9% in the previous month. 

 The general government’s gross debt increased to 76.1% of GDP in January, from 75.9% in December, while net debt narrowed to 54.2% of GDP from 55.7%, reflecting FX depreciation during the month. Over 12 months, the nominal deficit excluding FX swap transactions slid to 5.6% of GDP, from 5.8%. Following the approval of the pension reform, it is necessary to continue focusing on reducing mandatory expenditure, such as personnel spending, in order to consolidate a scenario of gradual convergence to primary surpluses that are compatible with structural stabilization in public debt.
 

Pedro Schneider 


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



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