Brazil’s primary budget surplus for January was 84.9 billion reais, lower than the anticipated 88.5 billion reais. Revenue increased by 3.7%, while spending rose by 4.4%, leading to a primary deficit of 42.2 billion reais over the past year. The government aims to balance the budget, with allowances for a small deficit.
In January, Brazil’s central government recorded a primary budget surplus slightly below market expectations due to inflation-adjusted spending growth outpacing revenue increases. The surplus was 84.9 billion reais ($14.6 billion), missing economists’ forecasts of 88.5 billion reais. Despite this, it was an improvement from the 79.5 billion reais surplus of January last year, indicating a positive trend in fiscal performance.
The increase in surplus was supported by a 3.7% real rise in net revenues compared to the previous year, while government spending experienced a larger increase of 4.4% during the same period. Over the past twelve months, the central government registered a primary deficit of 42.2 billion reais, equivalent to 0.32% of its gross domestic product (GDP).
The Brazilian government aims to balance the budget this year, allowing for a permissible deficit within a tolerance range of 0.25% of GDP, which translates to a potential shortfall of up to 31 billion reais. The discrepancy between revenue and spending highlights the ongoing challenge of managing fiscal policy effectively in light of rising costs.
Brazil’s central government experienced a primary budget surplus in January, although it fell short of market projections. Despite a shortfall in expected surplus, the government showed improvement compared to the previous January, primarily due to increased revenues. However, spending growth still outstripped revenue gains, presenting ongoing fiscal management challenges. The government’s target to balance the budget reflects a commitment to maintaining fiscal discipline moving forward.
Original Source: www.marketscreener.com
