Economic Information

PRESS RELEASE - October 30, 2017

Fiscal Policy
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I - Fiscal results

The consolidated public sector registered a primary deficit of R$21.3 billion in September. The Central Government posted a primary deficit of R$22.2 billion, while the regional governments and state-owned enterprises posted respective surpluses of R$776 million and R$191 million.

In the year, the consolidated public sector's cumulative primary deficit reached R$82.1 billion, compared with a primary deficit of R$85.5 billion in the same period of 2016. In the 12-month period up to September, the primary deficit reached R$152.4 billion (2.35% of GDP), 0.09 p.p. of GDP lower than the deficit observed in August.

The consolidated public sector's nominal interests, appropriated on an accrual basis, reached R$32 billion in September, compared with R$36 billion in August. This trajectory was impacted by the fewer number of working days in the month. In the year, nominal interests totaled R$303.1 billion, compared with R$295 billion in the same period of the previous year. Nominal interests reached R$415.1 billion (6.40% of GDP) over twelve months, falling by 0.14 p.p. of GDP compared with August.

The consolidated public sector's nominal result, which includes the primary result and nominal interests appropriated on an accrual basis, registered a deficit of R$53.3 billion in September. In the year, the nominal deficit totaled R$385.2 billion, compared with a deficit of R$380.5 billion in the same period of the previous year. In the 12-month period, the nominal result posted a deficit of R$567.5 billion (8.75% of GDP), falling by 0.23 p.p. of GDP compared with the previous month's deficit.

The nominal deficit observed in September was financed by expansions of R$26.6 billion in the net bank debt, R$16.2 billion in the securities debt and R$11.3 billion in other domestic sources of financing, including the monetary base. These expansions were partially offset by the decrease of R$749 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$3,312 billion (51.1% of GDP) in September, increasing by R$25.6 billion when compared with the previous month. This result reflected net redemptions of R$0.5 billion, an increase of R$0.1 billion due to the currency depreciation, and incorporation of interests in the amount of R$25.9 billion.

Items worth highlighting were net issuances of R$20.8 billion in LTN, of R$4.9 billion in NTN-F and R$1.7 billion in NTN-B, coupled with net redemptions of R$27.6 billion in LFT.

The participation by indexing factors registered the following evolution in relation to August: the percentage of exchange-indexed securities remained stable at 0.3%; Selic-indexed securities decreased from 24.3% to 23.8% due to net redemptions of LFT; fixed-rate securities increased from 26.6% to 27.3%, due to net issuances of LTN and NTN-F; and inflation-indexed securities rose from 22.8% to 23%, as a result of net issuances of NTN-B. The participation of repo operations decreased from 25.7% to 25.4%, showing net purchases of R$17.5 billion.

In September, the maturity structure of the securities debt on the market was as follows: R$79.4 billion, 2.4% of the total, maturing in 2017; R$478 billion, 14.4% of the total, maturing in 2018; and R$2,754.6 billion, 83.2% of the total, maturing as of January 2019.

The total net exposure in foreign exchange swap operations reached R$86.9 billion at the end of September. The result of these operations in the period according to the cash concept (liabilities linked to the Selic rate and assets linked to the exchange rate plus exchange coupon), was unfavorable to the Central Bank in the amount of R$188 million.

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

The PSND reached R$3,298.1 billion (50.9% of GDP) in September, increasing by 0.7 p.p. of GDP compared with the previous month.

In the year, the PSND/GDP ratio increased by 4.7 p.p. due to the incorporation of nominal interests (increase of 4.7 p.p.), the primary deficit (increase of 1.3 p.p.), the accumulated exchange rate devaluation of 2.8% (increase of 0.4 p.p.), the acknowledgment 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 0.2 p.p.).

The GGGD (Federal Government, INSS, state and municipal governments) reached R$4,789.3 billion in September (73.9% of GDP), rising by 0.2 p.p. of GDP compared with the previous month.