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Montevideo, November 23rd 2017 - 07:23 UTC

Brazil ends 2015 with record deficits: primary, 1.88% and fiscal 10.34%, of GDP

Saturday, January 30th 2016 - 11:53 UTC
Full article 8 comments
Brazil's primary budget deficit of 71.7 billion reais ($17.59 billion) in December contributed heavily to the annual result. Brazil's primary budget deficit of 71.7 billion reais ($17.59 billion) in December contributed heavily to the annual result.
Those budget maneuvers were the justification used by Congress in launching impeachment proceedings against President Dilma Rousseff last month. Those budget maneuvers were the justification used by Congress in launching impeachment proceedings against President Dilma Rousseff last month.

Brazil posted a primary budget deficit in 2015 of 111.25 billion Reais (roughly $27.29 billion), the biggest since the data series began in 2001, the Central Bank said on Friday. The primary budget deficit (before interest payments), equivalent to 1.88% of GDP, was more than triple the primary budget gap in 2014 (32.5 billion reais, or 0.57% of GDP).

 Including interest payments, Brazil's budget deficit amounted to 613 billion reais ($150.36 billion), equivalent to 10.34% of GDP.

Brazil's primary budget deficit of 71.7 billion reais ($17.59 billion) in December contributed heavily to the annual result.

The 12-month reading also was adversely affected by the government's decision in late December to pay back its outstanding debt of more than 72 billion reais with state-owned banks.

That debt grew because the government stopped depositing with those banks, used as paying agents, a portion of the total budgeted for items such as unemployment benefits and assistance for low-income families.

Those budget maneuvers were the justification used by Congress in launching impeachment proceedings against President Dilma Rousseff last month.

In a bid to get its fiscal house in order, Brazil's government launched an austerity plan in early 2015. Still not fully approved by Congress, it has included tax hikes and spending cuts that have cooled the domestic economy.

The austerity measures, however, have been unsuccessful in bringing down the deficit, which has continued to grow. The government repeatedly modified its primary budget target in 2015, acknowledging that a deficit was unavoidable. But it has thus far been more optimistic about 2016, forecasting a primary budget surplus equivalent to 0.5% of GDP.

Categories: Economy, Brazil.

Top Comments

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  • Brasileiro

    If the Selic rate is not reduced Brazil will pay R$ 500 billion in debt service in 2016. This represents 45% of the Union budget.

    And yet there are people who care about 1% of primary deficit.

    Tombini want to fool whom?

    This guy is playing into the hands of the PSDB and the Saxons!

    Jan 30th, 2016 - 12:08 pm 0
  • Captain Poppy

    Interest watching this ship sink in the night. Will anyone notice? Zika, corruption, pollution, some of the highest crime rates in the world, should make an interesting Olympics. Like children, everyone should get a participation medal for surviving. An athlete contact a flesh eating virus from bring in that sewer Brazil calls water. I think the chant at future selection committees for the Olympics will be...“remember Brazil”.

    Jan 30th, 2016 - 01:34 pm 0
  • ChrisR

    DumbAss Dilma is like all managers who don't learn from mistakes, either their own or others and perpetuate stupid actions in the vain hope 'it will work out OK this time'.

    It never does and most certainly never will.

    The Military will have to sort it out, sooner or later.

    Jan 30th, 2016 - 05:33 pm 0
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