Fiscal Policy

PRESS RELEASE - 12.28.2018

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1. Fiscal results

The consolidated public sector registered a primary surplus of R$15.6 billion in November. In the month, the Central government and state-owned enterprises recorded a deficit of R$17.1 billion and R$537 million respectively, while the regional governments turned in a surplus of R$2.0 billion.


The accumulated primary result of the consolidated public sector in the year posted a deficit of R$67.1 billion, compared to a deficit of R$78.3 billion in the same period of 2017. In the 12-month period until November, the consolidated public sector registered a primary deficit of R$99.4 billion (1.45% of GDP), 0.21 p.p. of GDP higher than the deficit accumulated until October.

Accrued nominal interests of the consolidated public sector reached R$35.0 billion in November, comparing to R$29.1 billion in November 2017. The result of Brazilian FX swap operations in the year-over-year (YoY) comparison accounted for this increase (loss of R$9.3 billion in November 2018, compared to profits of R$1.2 billion in November 2017). The 12-month nominal interests reached R$385.6 billion (5.64% of GDP), lower than in the 12-month period ended in November 2017 (R$402.0 billion, 6.15% of GDP).


The consolidated public sector nominal result, which includes the primary result and the accrued nominal interests, posted a deficit of R$50.6 billion in November. In the 12-month period, the accumulated nominal deficit reached R$485.0 billion (7.10% of GDP), increasing 0.26 p.p. of GDP when compared with the accumulated deficit observed in October.


2. Public Sector Net Debt (PSND) and Gross General Government Debt (GGGD)

The PSND reached R$3,644.4 billion (53.3% of GDP) in November, a decrease of 0.3 p.p. of GDP over the previous month. The 3.9% exchange rate depreciation occurred in the month contributed to this decrease with R$44.6 billion (0.7 p.p. of GDP). In the year, the increase of 1.7 p.p. in the PSND/GDP ratio mainly reflected the incorporation of nominal interest (+4.6 p.p.), the primary deficit (+1.0 p.p.), the effect of the 16.8% accumulated exchange rate depreciation (-2.5 p.p.) and the nominal GDP growth (-2.1 p.p.).

The GGGD - which comprises the Federal Government, INSS, and state and municipal governments - reached R$5,284.1 billion in November, corresponding to 77.3% of GDP (+0.3 p.p. of GDP in the month). In the year, the GGGB/GDP ratio increased by 3.2 p.p., reflecting mostly the incorporation of nominal interest (+5.5 p.p.), the effect of the exchange rate depreciation (+0.7 p.p.), and the nominal GDP growth (-3.1 p.p.).