I - Fiscal Results
In May, the consolidated public sector registered a primary deficit of R$ 11 billion. The Central Government has also presented a primary deficit of R$ 11.1 billion, while regional governments and state-owned enterprises showed surpluses of R$ 12 million and R$ 15 million, respectively.
For the year, the accumulated surplus has reached R$ 31.5 billion, compared to R$ 46.7 billion in the same period last year. Considering twelve-month flows, the primary surplus totaled R$ 76.1 billion (1.52% of GDP), compared to R$ 92.8 billion (1.87% of GDP) in April.
Nominal interest appropriated by indexing factor reached R$ 21.4 billion in May, compared to R$ 21.5 billion in April. In year-to-date terms, nominal interest added up to R$ 101.6 billion, compared to R$ 100.5 billion in the same period of 2013. In twelve-month terms, nominal interest totaled R$ 249.9 billion (5.01% of GDP), remaining stable as a percentage of GDP compared to April.
The nominal income (which includes the primary balance and nominal interest by indexing factor) showed a R$ 32.4 billion deficit in May and a R$ 70.1 billion deficit in the first five months of the year. Considering twelve-month flows, the nominal deficit totaled R$ 173.9 billion (3.48% of GDP), compared to R$ 156 billion (3.14% of GDP) in the previous month.
Items of highlight in the month include the R$ 29.2 billion expansion in securitized debt and a R$ 9.9 billion expansion of net bank debt, partially offset by a R$ 6.3 billion decrease in other sources of funding (which include the monetary base).
II - Federal securities debt
Securitized domestic debt outside the Central Bank, as assessed by portfolio position, totaled R$ 2,029.7 million (40.7% of GDP) in May, an increase of R$ 70 billion compared to the previous month. The result reflected net redemptions of R$ 51 billion and the incorporation or R$ 19 billion in interest.
Highlights include net issuances of R$ 36.6 billion in LTN, R$ 9.4 billion in LFT and R$ 5.5 billion in NTN-F, as well as net redemptions of R$ 1 billion in NTN-B.
The share of debt by index factor presented the following changes compared to April: the percentage of exchanged-indexed securities remained at 0.4%; the percentage of Selic-indexed securities increased from 14.7% to 15% for LFT issuances; the percentage of fixed-rate securities increased from 29.5% to 31% due to net issuances of LTN and NTN-F; and the percentage of price indices-indexed securities remained at 29.1%. The share of open market operations decreased from 26% to 24.2%, with net purchases of R$ 46.8 billion.
In May, the maturity schedule of Brazil's market securitized debt was as follows: R$ 229.8 billion (11.3% of the total) maturing in 2014; R$ 382.7 billion (18.9% of the total) maturing in 2015; and R$ 1,417.2 billion (69.8% of the total) maturing in or after January 2016.
Total net exposure in exchange swap operations reached R$ 203.8 billion at the close of May. The result of these operations (difference between ID profitability and exchange variation plus coupon) was favorable to the Central Bank by R$ 2.2 billion.
III - Public sector net debt
Brazil's public sector net debt reached R$ 1,725.9 billion in May (34.6% of GDP), rising 0.4 pp of GDP over the previous month.
The PSND/GDP ratio rose by 1 pp in year-to-date terms. The country's primary surplus and nominal GDP growth contributed to reduce that ratio by 0.6 and 1 pp of GDP, respectively. On the other direction, the nominal interest appropriated and currency appreciation of 4.4% in the year contributed to increase the ratio by 2 pp and 0.7 pp of GDP, also respectively.
Brazil's General Government Gross Debt (Federal Government, INSS, state and municipal governments) reached R$ 2,895.8 billion in May (58% of GDP), decreasing by 0.2 pp of GDP over the previous month.