Brazil posts biggest primary deficit in history for first quarter

Brazil registered the biggest primary deficit in history for the first quarter of the year. According to figures released Wednesday, the result was a negative $18.6 billion from January to June, compared to a deficit of $11.57 billion in the same period last year.

According to the National Treasury, one of the factors contributing to the deterioration of public accounts in the first quarter was the lack of balance brought about by lower revenues and higher mandatory expenses, especially those stemming from social security and civil servants. Another relevant factor was the payment of $6.2 billion in state debts, determined by a court ruling. Settling these debts—usually done in November and December—took place in May and June in a bid to avoid expenses adding up to more than $200 million with interest.

Social programs

The Accelerated Growth Program (PAC), the federal government's main investment program, shrank 48% with investments totaling slightly more than $3 billion from January to June. Investments under Minha Casa Minha Vida affordable housing program also underwent a change, adding up to $500 million, down 55% from the same period last year.

Translated by Fabrício Ferreira