Monday, December 4, 2023

The Brazilian fiscal deficit until July jumped to the equivalent of 7.21% of GDP

Brazil registered in the first seven months a nominal deficit in its public accounts of 439.606 million reais (some US$90,083.2 million), more than twice as high as that of the same period last year and equivalent to 7.21% of the GDP of the country, informed this Thursday the central bank.

The nominal public deficit in Brazil until July, which includes the result of the primary public sector and the payment of interest on the debt, jumped 147% compared to that of the first seven months of 2022 (178,242 million reais or US$36,525 million ).

The deficit in the last twelve months, until July, was 721,800 million reais (about US$147,909.8 million), the equivalent of 6.96% of GDP.

The Central Bank also reported that the primary deficit, the main indicator used in Brazil to measure the health of public accounts, was 0.92% of GDP between January and July, amounting to 56,179 million reais (about US$11,416 million).

This data represents a deterioration with respect to the previous month, when the accumulated primary deficit up to June stood at 0.39% of GDP.

Brazil’s gross public debt in July was 7.7 trillion reais (about US$1.58 trillion), the equivalent of 74.1% of GDP, increasing 0.5 percentage points from June (73.6% of GDP).

Controlling the deficit and debt is one of the great economic challenges of the President’s government Luiz Inacio Lula da Silvawhich has already obtained approval in Congress of a new fiscal framework with new rules to contain imbalances in public accounts.

The progressive leader also presented a tax reform for consideration by the Legislature and promised to present this week a proposal for the 2024 budget, the year in which he hopes to reduce the primary deficit to zero, which does not include debt interest payments.


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