Economic Information

PRESS RELEASE - DECEMBER 28, 2017

Fiscal Policy
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I - Fiscal results

The consolidated public sector recorded a primary deficit of R$ 909 million in November. The Central Government and state governments had a deficit of R$ 366 million and R$ 787 million, respectively, while state-owned companies recorded a surplus of R$ 245 million.

In the year, the consolidated public sector recorded a primary deficit of R$ 78.3 billion, compared to a deficit of R$ 85.1 billion in the same period of 2016. In the 12-month period up to November, a primary deficit of R$ 149 billion (2.29% of GDP) was recorded, 0.59 p.p. of GDP lower than the deficit registered in October.

The nominal interest of the consolidated public sector, appropriated on an accrual basis, reached R$ 29.1 billion in November, compared to R$ 35.3 billion in October. Contributing factors included fewer business days in the month and the RS 1.2 billion gain in foreign exchange swap operations, compared to a loss of RS 1.8 billion in October. In the year-to-date, nominal interest totaled R$ 367.5 billion compared to R$ 372.5 billion in the same period of the previous year. Nominal interest reached R$ 402 billion (6.17% of GDP) over twelve months, a decrease of 0.2 p.p. of GDP in relation to the value registered in October.

The nominal result of the consolidated public sector, which includes the primary result and appropriated nominal interest, posted a deficit of R$ 30 billion in November. In the year, the nominal deficit totaled R$ 445.8 billion, compared to a R$ 457.6 billion deficit in the same period of the previous year. In the 12-month period, the nominal deficit reached R$ 551 billion (8.45% of GDP), a decrease of 0.80 p.p. of GDP compared to the deficit observed in the previous month.

The nominal deficit in November was financed through expansions of R$ 16.5 billion in the government securities debt, of RS 10.9 billion in other domestic financing sources, which includes the monetary base, and of R$ 9.6 billion in the net bank debt, partly offset by the RS 7 billion reduction in the net external financing.

II - Federal securities debt

The domestic federal securities debt, outside the Central Bank, evaluated by portfolio position, totaled R$ 3,372 billion (51.7% of GDP) in November, increasing by R$ 60.6 billion compared to the previous month. This result reflected net issuances of R$ 34.5 billion, decreasing by R$ 0.1 billion due to currency appreciation, and incorporation of interests worth R$ 26.1 billion.

Items worth highlighting were net issuances of R$ 22.9 billion in LTN, of R$ 11.7 billion in LFT and of RS 4.2 billion in NTN-F, and net redemptions of R$ 3.5 billion in NTN-B.

Participation by indexing factors registered the following evolution compared to October: the percentage of exchange-indexed securities remained stable at 0.3%; Selic-indexed securities rose from 24.1% to 24.4%, due to net issuances of LFT; fixed-rate securities rose from 26.4% to 27.1%, due to net issuances of LTN and NTN-F; and inflation-indexed securities remained stable at 23.1%. Participation of repurchase operations fell from 25.9% to 24.8%, showing net purchases of R$ 50.9 billion.

In November, the maturity structure of the securities debt in the market was as follows: R$ 43 million, 0.001% of the total, maturing in December 2017; R$ 493.7 billion, 14.6% of the total, maturing in 2018; and R$ 2,878.3 billion, 85.4% of the total, maturing as of January 2019.

At the end of November, the total net exposure in foreign exchange swap operations reached R$ 78.6 billion. For the Central Bank, the result of these operations in the month, on cash basis (liability position in Selic rate and asset position in exchange variation plus coupon), was favorable and valued at R$ 1.2 billion.


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

PSND reached R$ 3,333.5 billion (51.1% of GDP) in November, increasing 0.4 p.p. of GDP compared to the previous month.

In the year, the 4.9 p.p. increase of the PSND/GDP ratio was due to the incorporation of nominal interest (increase of 5.6 p.p.), to the primary deficit (increase of 1.2 p.p.), the acknowledgement of debts (increase of 0.1 p.p.), the parity adjustment of the net foreign debt's currency basket t (reduction of 0.2 p.p.) and the effect of nominal GDP growth (decrease of 1.8 p.p.).

GGGD (Federal Government, INSS, state and municipal governments) reached R$ 4,852.6 billion in November (74.4% of GDP), remaining stable as a percentage of GDP compared to the previous month.