Brazil accounts post worst-ever primary deficit in 2016
The deterioration of public accounts last year was still the result of the economic crisis that has reduced tax collection in the past few years.
Brazilian public accounts are still in the red. Despite the financial contribution of the program of regularization of Brazilian assets abroad, the so-called Central Government (which covers the accounts of the National Treasury, Social Security and Brazil's Central Bank alone) posted the worst-ever primary deficit in 2016. Last year, the result stood negative at $49.257 billion, compared with a deficit of $36.639 billion recorded in 2015. This was the third consecutive year that the federal accounts reached a negative result.
The primary deficit, which is the negative result of the government accounts before interest payments on public debt, was below the revised target of $54.445 billion for the 2016 Central Government. The main factor that helped the government stay within the target was the regularization of assets abroad. Also known as repatriation, the program raised $14.9 billion last year, of which $7.66 billion remained at the National Treasury, and the remainder was shared with states and municipalities.
Crisis effects
The deterioration of public accounts last year was still the result of the economic crisis that has reduced tax collection in the past few years. In 2016, net revenues fell 4.1%, discounting it by official inflation. Total spending also dropped, but at a lower rate: 1.2%.
Spending on Social Security grew 7.2% above inflation in 2016 and has mostly affected last year's public accounts. Spending on government employees dropped 0.5%.
Public administration maintenance cost fell 8.1% last year. After spending a good portion of 2016 reaching a growing negative variation, federal investments, which include public works and equipment purchase, totaled $20.7 billion, up 7%.
The Central Government figures cover expenses recorded in real time in the Integrated System of Financial Administration (SIAFI). Tomorrow (Jan. 31), the Central Bank announces the 2016 primary deficit for the public sector, which covers state and municipal accounts.
Translated by Amarílis Anchieta
Fonte: Brazil accounts post worst-ever primary deficit in 2016
