Economic Information

PRESS RELEASE - May 31, 2016

Fiscal Policy
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I - Fiscal results

The consolidated public sector registered a surplus of R$10.2 billion in April. The Central Government and regional governments posted respective surpluses of R$8.7 and R$1.6 billion, while the state-owned companies posted a deficit of R$131 million.

In the year, the cumulative primary result reached a surplus of R$4.4 billion, compared with a surplus of R$32.4 billion in the first four months of 2015. In the 12-month period, a primary deficit of R$139.3 billion (2.33% of GDP) was observed, 0.05 p.p. of GDP higher than the value observed in March.

Net expenditures on nominal interests appropriated on an accrual basis reached R$23.3 billion in April, compared with net revenues of R$648 million in March. This trajectory was consequent upon lower gains with exchange swap operations in April (R$12.3 billion) compared with the previous month (R$42.7 billion). Cumulative nominal interests in the year amounted to R$108.7 billion, against R$146.1 billion in the same period of the previous year. In twelve months, nominal interests totaled R$464.4 billion (7.76% of GDP), rising by 0.32 p.p. of GDP when compared with March.

The nominal result, which includes the primary result and nominal interests appropriated on an accrual basis, posted a deficit of R$13.2 billion deficit in April. In the year, the nominal deficit totaled R$104.3 billion, compared with a deficit of R$113.6 billion in the same period of the previous year. In the 12-month period, the nominal result posted a deficit of R$603.7 billion (10.08% of GDP), rising 0.37 p.p. of GDP when compared with March.

The nominal deficit registered in April was financed through expansion of R$39.3 billion under the securities debt, partially offset by reductions of R$25.2 billion under the net bank debt, R$608 million under net external financing and R$355 million under other domestic sources of 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$2,670.2 billion (44.6% of GDP) in April, falling by R$83.3 billion when compared with the previous month. This result reflected net redemptions of R$108 billion, a decline of R$0.6 billion consequent upon the exchange rate appreciation, and incorporation of interests, R$25.3 billion.

Items worth highlighting are net redemptions of R$120.4 billion in LTN and R$0.9 billion in NTN-C; and net issuances of R$5.5 billion in LFT, R$4 billion in NTN-B and R$3.7 billion in NTN-F.

The participation by indexing factors in relation to March are as follows: the percentage of exchange-indexed securities dropped from 0.5% to 0.4%; Selic-indexed securities rose from 19.5% to 19.6%, due to net issuances of LFT; fixed-rate securities fell from 29.1% to 25.9%, due to net redemptions of LTN; and inflation-indexed securities remained unchanged at 26.2%. The participation of repo operations increased from 24.5% to 27.5%, showing net sales of R$110.6 billion.

In April, the maturity structure of the securities debt on the market was as follows: R$261.4 billion, 9.8% of the total, maturing in 2016; R$347.6 billion, 13% of the total, maturing in 2017; and R$2,061.2 billion, 77.2% of the total, maturing as of January 2018.

At the end of April, the total net exposure in exchange swap operations reached R$237.1 billion. The result of these operations in the month (difference between the yield of the Interbank Deposit (DI) and the exchange variation plus coupon) was favorable to the Central Bank by R$12.3 billion.

III - Public sector net debt

The public sector net debt (PSND) reached R$2,356.6 billion (39.4% of GDP) in April, rising 0.5 p.p. of GDP as compared with the previous month. The exchange appreciation of 3.04% in the month accounted for an expansion of R$33.4 billion in the PSND stock.

In the year, the PSND/GDP ratio increased by 3.2 p.p., reflecting the incorporation of interests (+1.8 p.p.), the impact of the accumulated exchange appreciation of 11.6% in the period (2.3 p.p.), the effect of the nominal GDP growth (-0.5 p.p.), the parity adjustment of the basket of currencies that compose the net external debt (-0.4 p.p.), and the primary surplus (-0.1 p.p.).

The Gross Debt of the General Government (Federal Government, INSS, state and municipal governments) reached R$4,039.3 billion in April (67.5% of GDP), rising 0.3 p.p. of GDP as compared with the previous month.