Itaú BBA - Seasonal primary surplus in January

Macro Brazil

< Volver

Seasonal primary surplus in January

marzo 1, 2019

January result has favorable seasonality

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

• The consolidated public sector posted a primary surplus of 46.9 billion reais in January, slightly below our call (48.8 billion) but higher than market consensus (41.1 billion). The central government had a surplus of 30.2 billion reais, missing a bit our 31.8 billion estimate, while regional governments and state-owned companies posted surpluses of 10.8 billion reais and 0.5 billion reais, respectively, that came in line with expectations. The consolidated primary deficit over 12 months remained at 1.6% of GDP, the same as in December. The January report stresses that meeting the annual primary deficit target for the public sector of 132 billion reais requires discipline, but shouldn’t be challenging.

• The general government’s gross debt was stable vs. December, at 76.7% of GDP in January, while the public sector’s net debt increased to 54.0% of GDP from 53.8%. The nominal deficit narrowed to 6.8% of GDP from 6.9%, reflecting lower interest expenses. A favorable fiscal scenario depends strictly on the approval of reforms, such as the pension reform, that signal a gradual return 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



< Volver