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Montevideo, June 19th 2018 - 16:07 UTC

Brazil's posts a primary budget surplus in April, because of annual income tax collection

Tuesday, May 31st 2016 - 07:21 UTC
Full article 4 comments
Treasury chief Otavio Ladeira said the steep surplus was due to an increase in the collection of the annual income tax due in April and a drop in expenditures Treasury chief Otavio Ladeira said the steep surplus was due to an increase in the collection of the annual income tax due in April and a drop in expenditures
President Temer, announced a series of measures aimed at closing a budget deficit including debt payments that could top 11% of GDP for the second straight year. President Temer, announced a series of measures aimed at closing a budget deficit including debt payments that could top 11% of GDP for the second straight year.

The Brazilian government posted a primary budget surplus in April well above market expectations due to a seasonal increase in tax revenues and a drop in subsidies, a senior official said on Monday. The government, which is struggling to lift the economy out of a deep recession, posted a primary budget surplus of 9.751 billion reais (US$2.72 billion) in April.

 Treasury chief Otavio Ladeira said the steep surplus was due to an increase in the collection of the annual income tax due in April and a drop in expenditures with subsidies after the government adopted new payment guidelines.

Ladeira told journalists the April surplus does not change the government's outlook for a primary deficit of 170.5 billion reais this year, equal to about 2.75% of GDP.

In March, the central government, which includes federal ministries, the central bank and social security administration, recorded a deficit of 7.9 billion reais, a record shortfall for that month, due to a decline in tax revenues.

The primary balance of payments, or the difference between revenues and expenditures prior to interest debt payments, is a key gauge of a country's capacity to honor its debt.

Interim President Michel Temer, who has replaced President Dilma Rousseff as she faces an impeachment trial, announced a series of measures aimed at closing a budget deficit including debt payments that could top 11% of GDP for the second straight year.

His government will propose legislation to cap public spending and agreed with state development bank BNDES for the early repayment of 100 billion reais in debt.

The record deficit forecast reflects the dire state of government finances after years of heavy spending and steep tax breaks under the Rousseff administration that cost Brazil its coveted investment-grade credit rating last year.

But some economists say the sheer size of the deficit estimate could pave the way for more public spending ahead of mayoral elections in October.

Brazil's economy probably shrank for a fifth straight quarter in early 2016 as the impeachment process against Rousseff paralyzed investment and pushed the country closer to its worst economic downturn on record.

Categories: Economy, Politics, Brazil.

Top Comments

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  • Brasileiro

    I wonder how the coup government and thief will do to launder money that will remain of the Federation budget is overvalued in a deficit of 170 billion reais.

    This amount was proposed and approved by the coup government. The previous deficit was 96 billion reais (still overvalued forecast, but more realistic).

    Certainly the coup leaders will use the money to pay for the favors of the Brazilian media, the judiciary and corrupt associations and entities that supported the coup through the massive dissemination of lies and half truths.

    A corrupt politician making the control and evaluation of the Federation spending. It's a joke!

    May 31st, 2016 - 10:18 am 0
  • ChrisR

    @ 1 Brasso

    Ha, ha, ha.

    It was YOUR party that started all the corruption and is still trying to remove the attentions of the state prosecutors from the remaining crooks.

    May 31st, 2016 - 01:48 pm 0
  • Terence Hill

    3 ChrisR
    Thank you for confirming that are in fact a liar, as you cannot meet your burden of proof. You as per usual attempted to nsupport your biased opinion with yet another porkie.
    Deep thinking, Philosophy; Burden of proof
    Burden of proof (or onus probandi in Latin) is the obligation on somebody presenting a new idea (a claim) to provide evidence to support its truth (a warrant). Once evidence has been presented, it is up to any opposing “side” to prove the evidence presented is not adequate. Burdens of proof are key to having logically valid statements: if claims were accepted without warrants, then every claim could simultaneously be claimed to be true.
    Abuse
    Burden of proof is often abused in rhetoric and arguments.
    Shifting the burden
    Fallacious shifting of the burden of proof occurs if someone makes a claim that needs justification, then demands that the opponent justify the opposite of the claim. The opponent has no such burden until evidence is presented for the claim.
    http://rationalwiki.org/wiki/Burden_of_proof

    May 31st, 2016 - 03:53 pm 0
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