Government posts $2.5 billion primary deficit January-July
The reduction in tax collection driven by the economic slowdown has made an impact on Brazil's 2015 public accounts. From January to July, the Central Government (Treasury, Social Security, and Central Bank) posted a primary deficit of $2,545 billion. In real figures (adjusted for inflation), the outcome is a record-low for the seven first months of the year in the current historic series, initiated in 1997, and also the first gap.
The primary deficit represents a negative balance in the public accounts before the payment of interest in the public debt. In July, the Central Government registered a deficit of $2,031 also the worst result for the month in real values and the second consecutive gap for a month. The deficits over the last two months brought the primary surplus of $1.853 billion accumulated from January to May into the red.
According to the National Treasury, the reduction in tax collection has been the main cause for the negative performance in the 2015 public accounts. From January to June, net revenues fell by 5.7%, adjusted for inflation. Total expenses, however, slipped a mere 0.7%, also with inflation adjustment.
Expenses are being held steady by investment, which totaled $9.073 billion in the first seven months of the year, with a real drop of 36.6% from 2014. Of this amount, spending under the Accelerated Growth Plan (PAC) reached $6.544 billion, with a real plunge of 36.5%. Spending with public servants was also on the wane, down 1.4%, inflation considered.
However, other types of spending are on the rise this year, like public administration, with a real surge of 5.7% in 2015 and subsidies, 205.2%, adjusted for inflation, driven by loans from the Brazilian Social Development Bank (BNDES).
Expenses in Social Security are up 2.7% in 2015. According to the National Treasury, this real growth is due to a 3.1% rise in the number of benefit grants.
The difficulties in slashing expenses and raising revenues led the economic staff to bring the target for the primary surplus down to $2.45 billion, or 0.15% of the GDP.
Translated by Fabrício Ferreira
Fonte: Government posts $2.5 billion primary deficit January-July
