Itaú BBA - Primary surplus of BRL 9.4 billion in October

Macro Brazil

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Primary surplus of BRL 9.4 billion in October

noviembre 29, 2019

Accumulated over 12 months, the consolidated primary deficit remained at 1.3% of GDP.


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  The consolidated public sector posted a primary surplus of BRL 9.4 billion in October, better than our forecast and the market consensus (at BRL 8.2 billion and BRL 8.0 billion, respectively). The central government posted a BRL 8.7 billion surplus under the National Treasury’s methodology (which considers the gap between revenues and expenses), better than our estimate of BRL 8.2 billion. Under the Central Bank’s methodology (contemplating just the change in the central government’s net debt), the surplus stood at BRL 8.5 billion. Regional governments and state-owned companies posted a BRL 0.2 billion deficit and a BRL 1.1 billion surplus, respectively. Accumulated over 12 months, the consolidated primary deficit remained at 1.3% of GDP. 

  The general government’s gross debt decreased from 79.0% in September to 78.3% of GDP in October, reflecting net withdrawals from the general government’s debt (due to the exchange between international reserves and swaps), while net debt increased from 55.3% to 55.9% of GDP. Over 12 months, the nominal deficit excluding FX swap transactions receded from 6.3% to 6.2% 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



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