Brazil primary deficit as share of GDP shrinks to smallest in a year
By Jamie McGeever
BRASILIA, Nov 29 (Reuters) - Brazil's public sector deficit as a share of the overall economy shrank to its smallest in a year, central bank figures on Friday showed, as the government posted a larger-than-expected surplus in October.
The primary deficit for the consolidated public sector, before interest payments are factored in, fell to 1.27% of gross domestic product in the 12 months to October from 1.29% the month before, the smallest shortfall in exactly a year.
That deficit of 89.8 billion reais is well below the government's official 2019 target of 132 billion reais. Economy Ministry officials have said recently it could actually come in closer to 80 billion reais by the end of the year.
The narrowing was driven by a 9.4 billion reais ($2.2 billion) primary surplus in October, which was more than the 8 billion reais predicted in a Reuters poll of economists and higher than the 7.8 billion reais surplus in the same month last year.
These figures are similar to the Treasury's snapshot of public sector finances released on Thursday. It also showed a surplus in October, a month usually noted for the inflow of oil-related funds and corporate and income tax intakes.
Taking into account interest payments, however, the picture is a little less rosy, as the government's nominal fiscal balance in October was a 10.9 billion reais deficit.
In the 12 months to October, the nominal public sector deficit rose to 456.2 billion reais, equivalent to 6.44% of GDP. On Thursday, Treasury Secretary Mansueto Almeida said this should end the year around 6.0% of GDP.
Central bank figures showed that interest payments in the year to October totaled 366.5 billion reais. That is equal to 5.17% of GDP, the central bank said, the highest since May.
Brazil's gross debt as a share of GDP fell to 78.3% from 79.0% the month before, but net debt rose to 55.9% of GDP from 55.3%, the highest in 16 years.
($1 = 4.20 reais)
(Reporting by Jamie McGeever and Marcela Ayres; Editing by Alex Richardson and Chizu Nomiyama)
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