Debt weight on GDP falls to lowest level since the beginning of the pandemic

Brazil’s gross debt fell to 78.2% of GDP (Gross Domestic Product) in May, against 78.9% in the previous month, according to data from the Central Bank released this Friday (29), at the lowest level since March 2019. 2020, when the Covid-19 pandemic was decreed and the government began a series of emergency spending.

The indicator continued to fall despite a primary deficit registered in the month for the public sector and an increase in interest expenses.

The country’s net debt, in turn, was 58.8% – analysts’ forecast was 57.9%. In the previous month, the indicator, which also includes government assets, such as international reserves, was at 58.3%.

In relation to spending on nominal interest, the total for the month was BRL 32.979 billion, up from BRL 21.897 billion in the same month of 2021. In 12 months, the figure reached BRL 500.502 billion, equivalent to 5.51% of the GDP, with the nominal public sector deficit amounting to 4.19% of GDP.

According to BC data, the consolidated Brazilian public sector recorded a primary deficit of R$32.993 billion in May, worse than expected by the market. According to a Reuters poll, the expectation was for a primary deficit of R$ 24.501 billion in the month.

The presentation of the May data was originally supposed to take place at the end of June, but the disclosures by the BC are still delayed even after the end of the strike of the agency’s servers.

Due to the delay, the numbers are out of step with the indicators of the Ministry of Economy. On Thursday (28), the ministry already reported the primary result for June for the central government, which does not include states, municipalities and state-owned companies, and had a surplus of R$ 14.4 billion, a record for the month.

SURPLUS IN 12 MONTHS

The result accumulated in 12 months reached a surplus of R$ 119.928 billion in May, which corresponds to 1.32% of GDP. In the previous month, the accumulated balance was 1.53% of GDP.

The data includes central government accounts (National Treasury, Central Bank and INSS), states, municipalities and state-owned companies and does not include interest expenses.

The May number was influenced by the negative results of the federal government and state-owned companies, while the data was in the blue for states and municipalities, which have been recording revenue gains with the resumption of activity and the high level of fuel prices.

The central government presented a negative balance of R$ 40.018 billion in the month. State-owned companies had a deficit of R$ 307 million.

The entities had a surplus of R$ 7.332 billion. Of this amount, the balance of the States was positive at R$ 5.786 billion, while the municipalities were in the blue at R$ 1.546 billion.