BRASILIA (Reuters) – Brazil’s central government recorded a slightly wider-than-expected primary budget deficit in February, Treasury data showed on Thursday, although the result improved sharply from a year earlier, mainly due to lower expenditures.
Latin America’s largest economy posted a deficit, excluding interest payments, of 31.673 billion reais ($5.52 billion) for the month, while economists polled by Reuters had expected a 30.4 billion reais shortfall.
In February last year, the primary deficit stood at 58.267 billion reais.
The annual improvement was primarily driven by a 12.6% real drop in total expenditures, translating into savings of 25.2 billion reais. It was also supported by a 3.1% real increase in revenues, adding 4.4 billion reais to public coffers.
According to the government, the sharp decline in spending was mainly influenced by a different schedule for federal court-ordered payments. In February last year, disbursements under this category were substantial, whereas this was not the case this year.
Over the 12-month period, the central government’s primary deficit stood at 13.2 billion reais, or 0.09% of gross domestic product (GDP), complying with the government’s annual fiscal target of zero deficit, which allows for a tolerance margin of 0.25% of GDP in either direction.
($1 = 5.7351 reais)
(Reporting by Marcela Ayres, Editing by Louise Heavens)
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