Economic Information

PRESS RELEASE - September 29, 2017

Fiscal Policy
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I - Fiscal results

The consolidated public sector registered a primary deficit of R$9.5 billion in August. The Central Government and state-owned enterprises turned in respective deficits of R$9.9 billion and R$111 million, while the regional governments posted a surplus of R$498 million.

In the year, the consolidated public sector registered a primary deficit of R$60.9 billion, compared with a deficit of R$58.9 billion in the same period of 2016. The 12-month cumulative result up to August registered a primary deficit of R$157.8 billion (2.44% of GDP), 0.2 p.p. of GDP less than the deficit observed in July.

Nominal interests appropriated on an accrual basis reached R$36 billion in August, compared with R$28.5 billion in July. This trajectory reflected the unfavorable result with foreign exchange swap operations in the month (loss of R$30 million) compared with the favorable result in the previous month (R$5.1 billion), in addition to the increase in the number of working days. Cumulative nominal interests in the year totaled R$271.1 billion, compared with R$254.6 billion in the same period of the previous year. In twelve months, nominal interests reached R$423.5 billion (6.55% of GDP), falling by 0.08 p.p. of GDP when compared with the July's result.

The consolidated public sector nominal result, which includes the primary result and nominal interests appropriated on an accrual basis, posted a deficit of R$45.5 billion in August. In the year, the nominal deficit totaled R$331.9 billion, compared with a deficit of R$313.4 billion in the same period of the previous year. In twelve months, the nominal deficit reached R$581.3 billion (8.98% of GDP), falling by 0.29 p.p. of GDP when compared with the previous month's deficit.

The nominal deficit registered in August was financed through expansions of R$40.7 billion in the securities debt and R$8 billion in the net bank debt, which was partially offset by decreases of R$2.9 billion in other sources of domestic financing, including the monetary base, and R$278 million in net external financing.


II - Federal securities debt

The domestic federal securities debt, outside the Central Bank, evaluated by the portfolio position, totaled R$3,286.4 billion (50.8% of GDP) in August, growing by R$61.5 billion compared with the previous month. This result reflected net issuances of R$32 billion, an expansion of R$0.1 billion due to currency depreciation, and incorporation of interests amounting to R$29.4 billion.

It is worth highlighting net issuances of R$23.9 billion in LTN, R$13.9 billion in LFT and R$4.9 billion in NTN-F, coupled with net redemptions of R$9.9 billion in NTN-B.

The participation by indexing factors registered the following evolution in relation to July: the percentage of exchange-indexed securities remained stable at 0.3%; Selic-indexed securities increased from 24.1% to 24.3%, due to net issuances of LFT; fixed-rate securities increased from 25.9% to 26.6%, due to issuances of LTN and NTN-F; and inflation-indexed securities rose from 23.1% to 22.8%, due to net redemptions of NTN-C. The participation of repurchase operations fell from 26.4% to 25.7%, consequent upon net purchases of R$29 billion.

In August, the maturity structure of the securities debt on the market was as follows: R$118.2 billion, 3.6% of the total, maturing in 2017; R$479.7 billion, 14.6% of the total, maturing in 2018; and R$2,688.6 billion, 81.8% of total, maturing as of January 2019.

At the end of August, the total net exposure in exchange swap operations reached R$86.2 billion. The result of these operations in the period (difference between the yield of the Interbank Deposit and the exchange variation plus coupon) was unfavorable to the Central Bank by R$30 million.


III - Public Sector Net Debt (PSND) and General Government Gross Debt (GGGD)

The PSND reached R$3,245.7 billion (50.2% of GDP) in August, increasing by 0.5 p.p. of GDP compared with the previous month.

In the year, the 4 p.p. increase in the DLSP/GDP ratio was due to the incorporation of nominal interests (increase of 4.2 p.p.), the primary deficit (increase of 0.9 p.p.), cumulative foreign exchange appreciation of 3.4% (increase of 0.5 p.p.), the settlement of debts (increase of 0.1 p.p.), the effect of nominal GDP growth (decrease of 1.5 p.p.), and the parity adjustment of the basket of currencies that compose the net external debt (decrease of 0.3 p.p.).

The GGGD (Federal Government, INSS, state and municipal governments) reached R$4,768.9 billion in August (73.7% of GDP), rising by 0.6 p.p. of GDP when compared with the previous month.