Brazil's gross public debt rises to 78.5% in August and primary deficit is higher than expected – Money Times


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Brazil's gross public debt rises to 78.5% in August (Image: REUTERS/Adriano Machado)

Brazil's gross debt registered a slight increase in August, when the Brazilian consolidated public sector presented a primary deficit larger than expected, according to data released this Monday by the Banco Central.

The country's gross public debt as a proportion of GDP rose from 78.4% in August to 78.5% last month, the highest level since October 2021. It was the fourteenth consecutive month of increase in this indicator.

Net debt, in turn, was 62.0%, compared to 61.8% in the previous month.

Expectations in a Reuters survey were 78.7% for gross debt and 62.3% for net debt.

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In August, the consolidated public sector recorded a primary deficit of 21.425 billion reais, greater than the expectation of economists consulted in a Reuters survey of a negative balance of 20.8 billion reais.

The performance shows that the central government had a deficit of 22.329 billion reais, while states and municipalities recorded a primary surplus of 435 million reais and state-owned companies had a positive balance of 469 million reais, data from the Central Bank showed.

“We see a very timid improvement in the central government's results, insufficient to reach the primary result target and, mainly, stabilize public debt”, assessed Tiago Sbardelotto, an economist at XP.

For him, data from the central government in the coming months should register a strong improvement after the approval of extraordinary measures related to the compensation of payroll tax relief which, according to official estimates, should increase revenue by at least 25.5 billion real.

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