Economic Information

PRESS RELEASE - September 30, 2016

Fiscal Policy
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I - Fiscal results

The consolidated public sector registered a primary deficit of R$22.3 billion in August. The central and regional governments posted respective primary deficits of R$22.1 billion and R$653 million, while the state-owned enterprises posted a surplus of R$529 million.

In the year, the cumulative primary deficit reached R$58.9 billion, compared with a deficit of R$1.1 billion in the same period of 2015. In the 12-month period, the cumulative primary deficit added up R$169 billion (2.77% of GDP), growing by 0.23 p.p. of GDP when compared with the previous month.

Nominal interests appropriated on an accrual basis reached R$40.7 billion in August, practically stable in comparison with July. Foreign exchange swap operations registered gains of R$4.3 billion in the month (compared to a loss of R$1.8 billion in July), in contrast with the expansion in the amount of appropriated interests due to the higher number of business days in the month. Cumulative nominal interests in the year up to August totaled R$254.6 billion, compared with R$338.3 billion in the same period of the previous year. In twelve months, nominal interests reached R$418 billion (6.86% of GDP), dropping by 0.19 p.p. of GDP against July.

The nominal result, which includes the primary result and nominal interests appropriated on an accrual basis, posted a deficit of R$62.9 billion in August. In the year, the nominal deficit totaled R$313.4 billion, compared with a deficit of R$339.4 billion in the same period of the previous year. In terms of the 12-month period up to August, the nominal deficit reached R$587 billion (9.64% of GDP), rising by 0.04 p.p. of GDP when compared with the value observed in June.

The monthly nominal deficit was financed through expansions of R$50.6 billion in the securities debt and R$17.2 billion in the net bank debt, partially offset by a reduction of R$4.8 billion in other domestic sources of financing, including the monetary base, and R$138 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$2,830.2 billion (46.5% of GDP) in August, declining R$2 billion as compared with the previous month. This result reflected net redemptions of R$34.1 billion and incorporation of interests of R$32.1 billion.

Items worth highlighting are net redemptions of R$83.2 billion in NTN-B and net issuances of R$31.2 billion in LTN, R$13.4 billion in LFT and R$4.8 billion in NTN-F.

The participation by indexing factors registered the following evolution in relation to July: the percentage of exchange-indexed securities remained stable at 0.4%; Selic-indexed securities rose from 19.7% to 20%; fixed-rate securities rose from 26.6% to 27.5%, due to net issuances of LTN and NTN-F; and inflation-indexed securities fell from 26.1% to 24%, due to net redemptions of NTN-B. The participation of repo operations increased from 26.9% to 27.9%, showing net sales of R$39.7 billion.

In August, the maturity structure of the securities debt on the market was as follows: R$124.9 billion, 4.4% of the total, maturing in 2016; R$388.4 billion, 13.7% of the total, maturing in 2017; and R$2,316.9 billion, 81.9% of the total, maturing as of January, 2018.

At the end of August, the total net exposure in exchange swap operations reached R$128.2 billion. The result of these operations in the period (difference between the yield of the Interbank Deposit and the exchange variation plus coupon) was favorable to the Central Bank by R$4.3 billion.

III - Public sector net debt

The public sector net debt (PSND) reached R$2,638.3 billion (43.3% of GDP) in August, rising 0.8 p.p. of GDP when compared with the previous month.

In the year, the PSND/GDP ratio increased by 7.1 p.p., consequent upon the impact of the incorporation of interests (+4.2 p.p.), the exchange rate appreciation of 17% in the period (+3.4 p.p.), the primary deficit (+1 p.p.), the effect of the nominal GDP growth (-1.1 p.p.), 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$4,272.8 billion in August (70.1% of GDP), rising by 0.5 p.p. of GDP when compared with the previous month.