BRASILIA (Reuters) – Brazil’s central government posted a primary budget deficit that came in higher than expected, official data showed on Thursday, even after a strong expansion in public revenues.
The deficit was 9.283 billion reais ($1.66 billion) in July, the Treasury said, while economists polled by Reuters were expecting a 8.8 billion real shortfall.
For the month, net revenue expanded 9.5% in real terms to 183.5 billion reais, but spending topped that at 192.8 billion reais even as it decreased 6%.
In the 12 months to July, the deficit totaled 233.3 billion reais, equivalent to 2.04% of Brazil’s gross domestic product (GDP), still far from the government’s official target of zeroing it this year.
The target has a tolerance margin of 0.25% of GDP, which means that the deficit for the year could be around 29 billion reais.
Speaking at a news conference, Treasury Secretary Rogerio Ceron said the annual data reflects the government’s decision to load the first few months of the year with some major spending.
“Now the trend is starting to reverse,” he said, adding that August’s tax revenue, which will be officially released later this month, was very strong.
According to Ceron, the government is readying new revenue measures if necessary to ensure that this year’s target is met.
The fresh measures could be released in the bimonthly revenue and expenditure report later this month.
($1 = 5.5804 reais)
(Reporting by Marcela Ayres; Editing by Chris Reese and Kylie Madry)
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