Public accounts have a deficit of R$ 30.3 billion in August, informs the Central Financial institution

It is the largest negative balance for the month since 2020. The public sector’s gross debt, an indicator closely watched by investors, dropped for the fourth time in a row and reached 77.5% of GDP.

The consolidated public sector accounts registered a primary deficit of R$ 30.3 billion in August this year, informed the Central Bank this Friday (30).

At the same time, public debt fell for the fourth consecutive month (see details further down this report).

The primary deficit occurs when tax revenues are below expenditures, disregarding the interest on the public debt. When the opposite happens, there is a surplus. The result encompasses the federal government, states, municipalities and state-owned companies.

This was the first deficit since May this year and also the biggest negative balance for August since 2020 – when the deficit totaled BRL 87.6 billion due to extraordinary expenses with the Covid-19 pandemic. The BC historical series begins in December 2001.

The deficit in August was solely due to the negative result in the federal government’s accounts, since states, municipalities and state-owned companies registered primary surpluses in the period.

• federal government registered a deficit of R$ 49.77 billion;
• states and municipalities had a positive balance of R$ 18.52 billion;
• state-owned companies had a surplus of R$ 970 million.

This Thursday, the National Treasury reported that the result of the government’s accounts in August was influenced by the expenditure of R$ 23.9 billion related to the agreement on the Campo de Marte airport, which is extraordinary.

In addition, according to the institution, there was also a large volume of payment of precatories in August this year — the expense will no longer occur this year.

According to the head of BC’s Statistics Department, Fernando Rocha, the agreement on Campo de Marte has no effect on the public sector’s accounts as a whole, since it enters as an expense, on the government side, but as revenue for the municipality. from Sao Paulo.

“The August deficit explains why expenses grew more than revenues. And the biggest contribution to the increase in expenses was a concentration [em agosto] of the payment of R$ 25 billion in precatories [sentenças judiciais pelo governo federal]” he explained.

partial of the year

In the accumulated period from January to August, according to the BC, public accounts registered a primary surplus of R$ 120.056 billion.

According to the institution, this is the largest positive balance, in proportion to the Gross Domestic Product (GDP), since 2012, that is, in ten years.

In the first eight months of 2021, there was a surplus of BRL 1.2 billion.

The good performance of public accounts helps the government reach its fiscal target for the year, which is a deficit of up to R$ 177.490 billion.

After interest expenses

When public debt interest is included in the account – in the concept known in the market as the nominal result, used for international comparison – there was a deficit of R$ 65.9 billion in the public sector accounts in August.

Already in 12 months until August of this year, the result was negative (nominal deficit) at R$ 392 billion, equivalent to 4.2% of GDP.

This number is closely monitored by risk rating agencies to define the credit rating of countries, an indicator taken into account by investors.

The nominal result of the public sector accounts is impacted by the high primary deficit, the actions of the BC in the exchange rate, and the basic interest rates (Selic) set by the institution to contain inflation. Currently, the Selic is at 13.75% per year, the highest value in six years.

According to the BC, last month there were nominal interest expenses totaling R$ 35.6 billion. In the twelve months through August, interest expenses totaled R$ 575 billion (6.2% of GDP).

gross debt

The public sector’s gross debt, an indicator that is also monitored by risk rating agencies, recorded a new drop in August. That was the fourth retreat in a rowaccording to the BC’s revised historical series.

In December last year, the debt was at 80.3% of GDP, totaling R$ 6.96 trillion. In July of this year, it reached 78.2% of GDP, equivalent to R$7.21 trillion, and in August, it dropped to 77.5% of GDP, or R$7.23 trillion.

This is the lowest level since March 2020, when debt was at 77% of GDP. That is, it is the lowest level in just over two years.

According to the Central Bank, this increase in debt in August is mainly the result of the effect of nominal GDP growth and net redemptions (above the issuance values) of public debt securities.

The Brazilian gross debt is still above the average of other emerging countries, which is around 65% of GDP.

Source: G1