Brazil central gov’t primary budget short of target

BRASILIA, Jan 27 (BestGrowthStock) – The Brazilian central
government’s primary budget balance turned to a surplus in
December from the year-earlier period, the Treasury said on
Wednesday, but still reflected worsening public accounts.

The central government — the Treasury, the central bank
and the national social security system — posted a surplus of
1.7 billion reais ($914 million) in December, compared with a
deficit of 20 billion reais a year earlier.

The performance was down from a 10.7 billion reais surplus
in November.

For the entire year of 2009, the surplus totaled 39.2
billion reais, or 1.25 percent of gross domestic product. That
is far short of the 2.38 percent of GDP in the same period a
year earlier.

The government had a central government budget surplus
target of 1.4 percent of GDP last year. But it may choose to
exclude investments worth 400 million reais that it considers a
priority, thereby increasing the surplus.

The International Monetary Fund first endorsed the
“flexible” accounting standard in an agreement with Brazil in
2005 as a way to maintain priority investments without
abandoning primary surplus targets.

Brazil’s budget performance worsened substantially last
year as tax revenues tumbled and the government boosted
spending on economic stimulus measures.

The central government surplus feeds into the consolidated
public-sector primary surplus, which is closely tracked by
investors as a measure of Brazil’s ability to pay its debts.

The consolidated primary surplus, which excludes interest
payments but includes state-owned companies, is to be announced
on Thursday.

($1=1.859 reais)

Investment Advice

(Reporting by Isabel Versiani; Writing by Raymond Colitt;
Editing by Kenneth Barry)

Brazil central gov’t primary budget short of target