Public sector records primary deficit of BRL 14.1 billion in March

The Brazilian consolidated public sector recorded a primary deficit of R$ 14.1 billion in March, according to data from the Central Bank released this Friday (28) (see full text). The result is the worst for the month since 2020 in the Central Government, States, municipalities and state-owned companies with the exception of Petrobras and Eletrobras, when accounts closed in the red at R$ 23.7 billion.

The primary deficit occurs when expenditures exceed revenues collected through taxes excluding interest. The March result was also worse compared to the same month of 2022, when public accounts closed in blue and recorded a surplus of BRL 4.3 billion.

On the other hand, the primary deficit in March was smaller than that registered in February, with negative R$ 26.4 billion. In the accumulated of 12 months, the public sector records a surplus of 74.8 billion, equivalent to 0.74% of the Gross Domestic Product (GDP).

For economist Tiago Sbardelotto, an analyst at brokerage XP, the result was worse than expected by the market, and “reflects a combination of lower revenues (mainly tax) and higher spending on social security and assistance programs”.

The BC report also points out that the deficit of the Central Government and regional governments was R$ 9.7 billion and R$ 4.6 billion, respectively, while state-owned companies recorded a surplus of R$ 154 million.

The gross debt, which includes the Federal Government, the INSS and state and municipal governments, grew by 0.1 pp and reached 73% of GDP at R$ 7.4 trillion. This result reflected, according to the monetary authority, the impacts of appropriated nominal interest, net debt redemptions and the effects of variation in the Gross Domestic Product.