Brazil’s central government achieves first primary surplus in 9 years in September

RIO DE JANEIRO, BRAZIL – The central government, formed by the National Treasury, the Central Bank, and Social Security, recorded a primary surplus of R$303 million (US$54 million) in September, the first positive figure for the month since 2012, helped by increased tax revenues.

In September last year, the deficit had been R$76.144 billion, heavily impacted by extraordinary expenses associated with coping with the Covid-19 pandemic.

“Extraordinary credits, financial support to states and municipalities, and subsidies intended for the Emergency Program for Access to Credit (PEAC Maquininhas) showed a reduction of R$40.9 billion, R$21.3 billion, and R$5.5 billion, respectively, when compared to September 2020,” the Treasury said.

The day before, the Revenue Service had already disclosed a record collection for September, influenced by higher corporate tax revenue.

Compared to the same month last year, the net revenue of the central government had a real increase of 9.3%, to R$128.448 billion. On the other hand, expenditure fell 36.4% on the same basis of comparison, to R$128.146 billion.

“The September data corroborate the trend of consistent improvement in public accounts throughout 2021, the result of strong revenue collection and a greater focus on expenses related to confronting the pandemic,” said the Treasury.

In the accumulated first nine months of the year, the deficit in public accounts was R$82.486 billion, against R$677.446 billion in 2020.

In 12 months, the primary deficit reached R$154.2 billion, equivalent to 1.8% of Gross Domestic Product (GDP). In late September, the Ministry of Economy improved its projection of primary deficit for the central government in 2021 to R$139.4 billion, given the prospect of higher revenues this year.

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