Economic Information

PRESS RELEASE - April 29, 2016

Fiscal Policy
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I - Fiscal results

The consolidated public sector registered a primary deficit of R$10.6 billion in March. The Central Government posted a primary deficit of R$8.9 billion, while regional governments and state-owned companies turned in respective primary deficits of R$893 million and R$806 million.

In the year, the cumulative primary result reached a deficit of R$5.8 billion, compared with a surplus of R$19 billion in the same period in 2015. In the 12-month period, a primary deficit of R$136 billion (2.28% of GDP) was observed, 0.18 p.p. of GDP higher than that observed in February.

Nominal interests appropriated on an accrual basis reached R$648 million in March, compared with net expenditures of R$29.8 billion in February. This trajectory was consequent upon gains of R$42.7 billion with foreign exchange swap operations in the month. Cumulative nominal interests in the year amounted to R$85.4 billion, compared with R$143.8 billion in the same period of the previous year. In twelve months, nominal interests added up to R$443.3 billion (7.44% of GDP), dropping by 1.2 p.p. of GDP when compared to February.

The nominal result, which includes the primary result, and nominal interests appropriated on an accrual basis, posted a deficit of R$10 billion in March. In the year, the nominal deficit totaled R$91.1 billion, compared with a deficit of R$124.8 billion in the first quarter of the previous year. In the 12-month period, the nominal deficit reached R$579.3 billion (9.73% of GDP), falling by 1.02 p.p. of GDP compared to the February's result.

The nominal deficit in March was financed through expansions of R$9.2 billion in the securities debt, R$5.7 billion in the net bank debt, and R$3.9 billion in the net external financing, partially offset by a reduction of R$8.9 billion in the other sources of domestic financing, including the monetary base.

II - Federal securities debt

The domestic federal securities debt, outside the Central Bank, evaluated by the portfolio position, totaled R$2,753.5 billion (46.2% of GDP) in March, increasing by R$75.3 billion when compared with the previous month. This result reflected net issuances of R$45 billion, a decline of R$2 billion due to the exchange rate appreciation, and incorporation of interests worth R$32.3 billion.

Items worth highlighting are net issuances of R$23 billion in LTN, R$10.3 billion in NTN-B, R$8.1 billion in NTN-F and R$3.9 billion in LFT.

The participation by indexing factors registered the following evolution in relation to February: the percentage of exchange-indexed securities remained stable at 0.5%; Selic-indexed securities rose from 19.2% to 19.5%, due to net issuances of LFT; fixed-rate securities increased from 28% to 29.1%, due net issuances of LTN and NTN-F; and inflation-indexed securities increased from 25.6% to 26.2%, due to net issuances of NTN-B. The participation of repo operations decreased from 26.4% to 24.5%, showing net purchases of R$78.9 billion.

In March, the maturity structure of the securities debt on the market was as follows: R$410.3 billion, 14.9% of the total, maturing in 2016; R$340.5 billion, 12.4% of the total, maturing in 2017; and R$2,002.7 billion, R$72.7% of the total, maturing as of January 2018.

At the end of March, the total net exposure in exchange swap operations reached R$368.4 billion. The result of these operations in the period (difference between the yield of the Interbank Deposit and the exchange variation plus coupon) was favorable to the Central Bank by R$42.7 billion.

III - Public sector net debt

The public sector net debt (PSND) reached R$2,314.8 billion (38.9% of GDP) in March, rising 2.1 p.p. of GDP compared with the previous month. The exchange appreciation of 10.6% in the month accounted for an increase of R$129.2 billion in the PSND stock.

In the year, the PSND/GDP ratio increased by 2.7 p.p. as a result of the incorporation of interests (+1.4 p.p.), the primary deficit (+0.1 p.p.), the impact of accumulated exchange appreciation of 8.9% over the period (+1.8 p.p.), the effect of the nominal GDP growth (-0.3 p.p.), and the parity adjustment of the basket of currencies that compose the net external debt (-0.3 p.p.).

The gross debt of the General Government (Federal Government, INSS, state and municipal governments) reached R$4,005.7 billion in March (67.3% of GDP), falling by 0.4 p.p. of GDP when compared with the previous month.