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By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The consolidated public sector in Brazil (federal, state, municipal and state-owned companies) registered a primary deficit of R$155.8 billion in 2016 according to the country’s Central Bank (CB). The deficit was equivalent to 2.47 percent of the country’s GDP, and the largest in fifteen years.

Brazil's Central Bank, Rio de Janeiro, Brazil, Brazil News
Brazil’s Central Bank report shows largest public deficit in fifteen years for 2016, photo internet recreation.

“The increased deficit was due to the reduction of economic activity,” said Fernando Rocha of the Central Bank’s Economic Department, to local news outlet G1. “We have had very weak economic activity and the recovery has been very slow, much more than expected.

Rocha, however, said the public accounts remained within the target for 2016, which was approved by Brazil’s Congress at R$163.9 billion. In 2015 the primary deficit was of R$111.2 billion equivalent to 1.85 percent of the GDP.

The federal government closed 2016 with a record primary deficit of R$159.4 billion last year. The deterioration of public accounts as a consequence of the worst economic crisis Brazil has ever faced has reduced revenues in recent years.

With rising unemployment and decreasing activity, revenues declined significantly in the federal, state and local governments coffers. In 2016, net revenues obtained by the federal government declined by 4.1 percent while total expenditures fell at a slower pace of 1.2 percent.

State governments on the other hand registered a surplus of R$6.787 billion while the municipal governments, a deficit of R$2.121 billion. State-owned companies (excluding Petrobras and Eletrobras) registered a deficit of R$983 million. Both Petrobras and Eletrobras have not released their annual fiscal records.

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