In January, the Brazilian consolidated public sector registered a primary surplus of R$ 101.8 billion, a record for the entire historical series, which began in 2001. The data were released by the Central Bank this Friday (25).
The result is much higher than that of January last year, when the primary surplus had been R$ 58.4 billion, which was the record of the series until then.
The amount includes the results of the central government (federal government, Central Bank and INSS), state and municipal governments and state-owned companies. The positive balance means that, in the period, public sector tax revenues exceeded expenditures, excluding public debt interest.
The central government, regional governments and state-owned companies recorded primary surpluses of R$77.4 billion, R$20 billion and R$4.4 billion, respectively, in the month.
The National Treasury had already indicated, on Thursday (24), that the federal government’s accounts had the best result for a month of January in the entire historical series, which began in 1997.
According to the Treasury, the significant increases in revenues managed by the Federal Revenue and also in non-tax collection contributed to the positive number in the first month of the year.
As for the positive result of state and municipal governments, ordinary transfers from the Union are among the determining factors. In addition, over the last year, states have benefited from gains in ICMS collection on fuel, with the increase in the prices of these inputs.
“We see a growth both in transfers that the Union makes to regional governments, through tax sharing, of 15.1% in real terms, and in revenues from these spheres of government”, said the head of the Bank’s Statistics Department. Central, Fernando Rocha.
“In terms of own taxes, with ICMS being the most important collected by the States, there was a growth of 6.5% from January 2021 to January 2022”, he detailed at the press conference to present the tax figures.
According to the BC, in the 12-month period, the consolidated public sector had a surplus of R$ 108.2 billion until January, which corresponds to 1.23% of GDP (Gross Domestic Product). Comparison against GDP is done to show whether government debt is sustainable.
In the nominal result of the consolidated public sector, which considers public debt interest, there was a surplus of R$ 84.1 billion in January (the largest ever recorded). In the 12-month period, the result was negative, with a nominal deficit of R$ 317.5 billion, equivalent to 3.62% of GDP.
Net debt, in turn, was 56.6% of GDP in January, against 57.2% in the previous month. This result is the lowest percentage since May 2020, when it was 54% of GDP.
“The nominal surplus result was able to reduce the net debt even with the increase caused by the exchange rate appreciation of 4%”, observed Rocha.
The BC also showed that the government’s gross debt fell again and was 79.6% of GDP, down 0.7 percentage point in January, the best result since April 2020. That month, it totaled 78.4% of GDP . In all, the gross debt – which comprises the federal government, INSS and state and municipal governments – totaled R$ 7 trillion in the first month of the year.
This result is mainly due to the effect of the change in nominal GDP (reduction of 0.8 percentage point), net debt redemptions (reduction of 0.4 percentage point), in addition to the effect of the exchange rate appreciation (fall of 0 .2 percentage point).
The 2021 GDP advanced with the recovery of economic activity compared to the first year of the Covid-19 pandemic.
Gross debt ended 2021 at 80.3% of GDP (R$7 trillion) due to fiscal improvement. The increase in inflation contributed to increase the government’s revenue collection gains in the last year. The appreciation of the dollar and the barrel of oil, in addition to the freezing of civil servants’ salaries in 2021, also weighed favorably on revenues.
In February last year, at the height of spending to fight the pandemic, public debt reached 89.36% of GDP, the highest percentage in the historical series started in 2006.
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