Brazil government debt-to-GDP ratio in April posts biggest fall since 2010

RIO DE JANEIRO, BRAZIL – (REUTERS) Brazil’s public finances improved significantly and across the board in April, official figures showed on Monday, May 31, as a chunky budget surplus contributed to the biggest decline in government debt as a share of the economy in over a decade.

Public sector debt fell to 86.7% of gross domestic product in April, central bank figures showed, the lowest since July last year and down sharply from 88.9% the month before.

The decline of 2.2 percentage points was the steepest month-on-month fall since December 2010, according to Refinitiv data.

Net public sector debt also fell in April, to 60.5% of GDP from 61.1% the month before. That was the lowest since October.

Stronger-than-expected tax revenues in recent months have helped brighten the outlook for Brazil’s public finances, so much so that Economy Minister Paulo Guedes said last week that the overall budget deficit could swing to surplus as early as 2023.

The Central Bank’s figures on Monday showed that in April the public sector registered a surplus, after excluding interest payments, of R$24.3 billion (US$4.7 billion), far more than the R$16.75 billion surplus forecast in a Reuters poll of economists.

The nominal surplus in the month including interest payments was R$30 billion, the Central Bank said.

The accumulated primary deficit in the 12 months through April was R$544.5 billion, or 7.1% of GDP, the smallest deficit since June last year and below a downwardly revised 8.8% of GDP in the year through March, the central bank said.

The nominal deficit including interest payments in the year through April was R$827.2 billion, or 10.8% of GDP, compared with R$973 billion, or 12.9%, of GDP the month before.