BRASILIA (Reuters) -Brazil’s central government posted a better-than-expected primary budget surplus in September, Treasury data showed on Thursday, boosted by dividends from the state-owned oil company Petrobras and higher tax revenues.
The primary surplus reached 10.954 billion reais ($2.1 billion) in September, above the 9.95 billion reais surplus forecast by economists polled by Reuters.
The result also came better than the 590 million reais surplus recorded in the same month in 2021.
While the central government’s net revenue rose 6.4% in real terms in September, expenses contracted by 1.1%, mainly due to the decrease in extraordinary credits to combat the COVID-19 pandemic.
On the revenue side, the Treasury received 12.6 billion reais in dividends from Petrobras, said the government, also benefiting from increased tax revenue over income.
In the 12 months to September, the central government recorded a primary surplus of 84.9 billion reais, equal to 1.01% of gross domestic product.
The government of President Jair Bolsonaro, who seeks re-election in a Oct 30 runoff against former leftist President Luiz Inacio Lula da Silva, expects the central government to end this year with a primary surplus of about 40 billion reais, its first since 2013.
Combined with the 45 billion reais the Treasury is about to receive from the development bank BNDES, this will lead the government debt as a share of gross domestic product to fall by 4.1 percentage points this year, to 76.2%, said Treasury Secretary Paulo Valle at a news conference.
If confirmed, this will be the lowest level of Brazilian gross debt since 2019 (74.4%), after jumping to 88.6% of GDP in 2020 fueled by a surge in coronavirus expenses.
For next year, however, a new primary deficit has already been calculated in the budget proposal sent to Congress, showing that Latin America’s largest economy will continue struggling to reduce its public debt.
($1 = 5.2891 reais)
(Reporting by Marcela Ayres; Editing by Aurora Ellis and Alistair Bell)
