Economic Information

PRESS RELEASE - March 31, 2015

Fiscal Policy
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I - Fiscal results

The consolidated public sector posted a primary deficit of R$2.3 billion in February. The Central Government and the state-owned companies turned in respective deficits of R$6.7 billion and R$828 billion, while regional governments registered a surplus of R$5.2 billion.

In the year, the cumulative primary surplus reached R$18.8 billion, as compared to a surplus of R$22.2 billion in the first two months of 2014. In terms of 12-month period, a primary deficit of R$35.8 billion (0.69% of GDP) was observed up to February, against a deficit of R$31.4 billion (0.61% of GDP) up to January.

Nominal interests appropriated on an accrual basis reached R$56.3 billion in February, as compared to R$18 billion in January. This upward trajectory was consequent upon the adverse result of R$27.3 billion with foreign exchange swap operations in the month, as compared to a positive result of R$10.8 billion in January. Cumulative nominal interests in the year added up to R$74.4 billion, as compared with R$42 billion in the same period in 2014. Over twelve months, nominal interests totaled R$343.7 billion (6.65% of GDP), 0.84 p.p. of GDP up from January.

The nominal result, which includes the primary result and nominal interests appropriated on an accrual basis, posted a deficit of R$58.6 billion in February. In the year, the nominal result posted a deficit of R$55.6 billion, as compared with a deficit of R$20 billion in the first two months of 2014. In terms of 12-month period, the nominal deficit reached R$379.5 billion (7.34% of GDP), 0.92 p.p. up from January.

The monthly nominal deficit reflected increases of R$54.7 billion in the securities debt, R$5.1 billion in the net bank debt, and R$717 million in the other domestic financing sources, including the monetary base, which were partially offset by the R$1.8 billion decline under net external financing.


II - Federal securities debt

The domestic federal securities debt outside the Central Bank, evaluated by the portfolio position, totaled R$2,213.4 billion (42.8% of GDP) in February, growing by R$75.4 billion as compared to the previous month. This result reflected net issuances of R$47.2 billion, an increase of R$1.1 billion due to the foreign exchange depreciation in the month, and the appropriation of interests, R$27.1 billion.

It should be highlighted net issuances of R$35.3 billion in LTN (National Treasury Bills), R$17.1 billion in LFT (Treasury Financing Bills), R$6.3 billion in NTN-F (National Treasury Notes - Series F), and net redemptions of R$11 billion in NTN-B (National Treasury Notes - Series B).

The participation by indexing factors registered the following evolution when compared to January: the percentage of exchange-indexed securities rose from 0.4% to 0.5%; the participation of Selic-indexed securities rose from 14.3% to 14.7%, due to net issuances of LFT; the participation of fixed-rate securities increased from 28.4% to 29.5%, due to net issuances of LTN and NTN-F; and the participation of inflation-indexed securities dropped from 26.8% to 26.5%, due to net redemptions of NTN-B. The share of repo operations dropped from 29.7% to 28.5%, reflecting net purchases of R$23.4 billion.

In February, the maturity structure of the securities debt on the market was as following: R$389.5 billion, 17.6% of the total, maturing in 2015; R$349 billion, 15.8% of the total, maturing in 2016; and R$1,474.9 billion, 66.6% of the total, maturing as of January 2017.

At the end of February, the total net exposure in foreign exchange swap operations reached R$320 billion. The result of these operations over the period (the difference between the yield of the Interbank Deposit (DI) and the foreign exchange variation plus coupon) was unfavorable to the Central Bank by R$10.8 billion.


III - Public sector net debt

The public sector net debt (PSND) reached R$1,877.1 billion in February (36.3% of GDP), dropping by 0.3 p.p. of GDP as compared to the previous month. The foreign exchange depreciation of 8.12% over the month accounted for a reduction of R$65.8 billion in the PSND stock.

In the year, the PSND/GDP ratio dropped by 0.4 p.p., reflecting the adjustments consequent upon the 8.4% cumulative foreign exchange depreciation over the period (-1.3 p.p.), the GDP nominal growth (-0.3 p.p.), and the incorporation of interests (+1.4 p.p.).

The General Government Gross Debt (including the Federal Government; INSS; state, and municipal governments) reached R$3,386.9 billion in February (65.5% of GDP), 1.1 p.p. of GDP up from January.