Economic Information

PRESS RELEASE - March 31, 2017

Fiscal Policy
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I - Fiscal results

The consolidated public sector registered a primary deficit of R$23.5 billion in February. The Central Government posted a primary deficit of R$28.8 billion, while regional governments and state-owned enterprises posted respective surpluses of R$5.3 billion and R$46 million.

The cumulative primary surplus in the year reached R$13.2 billion, compared with a surplus of R$4.9 billion in the first two months of 2016. In the 12-month period up to February, the primary deficit of the consolidated public sector reached R$147.4 billion (2.34% of GDP), remaining stable, as a proportion of GDP, against the January's result.

Nominal interests of the consolidated public sector, appropriated on an accrual basis, reached R$30.8 billion in February, compared with R$36.4 billion in January. This trajectory reflected the lower number of working days in the month. Nominal interests added up to R$67.2 billion in the year up to February, compared with R$86 billion in the same period in 2016 In 12 months, nominal interests totaled R$388.2 billion (6.16% of GDP), remaining stable, as a proportion of GDP, against the January's result.

The nominal result, which includes the primary result and nominal interests appropriated on an accrual basis, posted a deficit of R$54.2 billion in February. The nominal deficit totaled R$53.9 billion in the year, compared with a deficit of R$81.1 billion in the first two months of the previous year. In the 12-month period, the nominal deficit closed at R$535.6 billion (8.49% of GDP), remaining practically stable, as a proportion of GDP, against the January's result (8.50% of GDP).

The nominal deficit observed in February was financed through expansions of R$51.8 billion in the securities debt and R$3.3 billion in other domestic financing sources, including the monetary base, which were partially offset by reductions of R$677 million in the net external financing and R$155 million in the net bank debt.


II - Federal securities debt
The domestic federal securities debt, outside the Central Bank, evaluated by the portfolio position, totaled R$3,020.7 billion (47.9% of GDP) in February, increasing by R$82.2 billion compared with the previous month. The result reflected net issuances of R$57.1 billion, a decline of R$0.1 billion due to currency appreciation, and incorporation of interests of R$25.2 billion.

Items worth highlighting were net issuances of R$37 billion in LTN, R$17.7 billion in LFT and R$6.2 billion NTN-F; net redemptions of R$2.9 billion in NTN-B, R$0.6 billion in NTN-C and R$0.2 billion in CFT-E.

The participation by indexing factors registered the following evolution in relation to January: the percentage of exchange-indexed securities remained stable at 0.4%; Selic-indexed securities rose from 22% to 22.4%, due to net issuances of LFT; fixed-rate securities increased from 24.8% to 25.8%, as a result of net issuances of LTN and NTN-F; while inflation-indexed securities fell from 24.9% to 24.7%, due to net redemptions of NTN-B. The participation of repo-operations decreased from 27.6% to 26.6%, showing net purchases of R$39.6 billion.

In February, the maturity structure of the securities debt on the market was as follows: R$304.3 billion, 10.1% of the total, maturing in 2017; R$441.1 billion, 14.6% of the total, maturing in 2018; and R$2,275.3 billion, 75.3% of the total, maturing as of January 2019.

At the end of February, the total net exposure in exchange swap operations reached R$83.1 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$2.1 billion.


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

The PSND reached R$2,987.8 billion (47.4% of GDP) in February, rising by 0.8 p.p. of GDP compared with the previous month, a trajectory mainly influenced by the appropriation of nominal interests and the primary deficit observed in the month.

In the year, the PSND/GDP ratio increased by 1.2 p.p. due to incorporation of nominal interests (increase of 1.1 p.p.), exchange rate appreciation of 4.9% in the month (increase of 0.8 p.p.), the effect of the nominal GDP growth (decrease of 0.3 p.p.), the primary surplus (decrease of 0.2 p.p.) and the parity adjustment of the basket of currencies that compose the net external debt (decrease of 0.1 p.p.).

The GGGD (Federal Government, INSS, state and municipal governments) reached R$4,450 billion in February (70.6% of GDP), rising by 0.6 p.p. as a proportion of GDP when compared with the previous month.