Brazil’s gross debt-to-GDP ratio decreased to 75.3% in January, down from 76.1% in December, surpassing market expectations. This decline was influenced by net debt redemptions and GDP growth. The public sector achieved a primary surplus of 104.096 billion reais, contributing to a rolling 12-month deficit of 0.38% of GDP.
In a surprising turn of events, Brazil’s public sector gross debt-to-GDP ratio decreased in January, according to the central bank’s data released on Friday. This figure fell to 75.3%, a decline from 76.1% in December, and significantly below the 76.2% expected by economists surveyed by Reuters.
The reduction of 0.8 percentage points in the debt ratio was primarily attributed to net debt redemptions coupled with nominal GDP growth. In addition, the public sector achieved a primary surplus of 104.096 billion reais, equivalent to $17.92 billion, which exceeded the anticipated 102.135 billion reais.
The rolling 12-month deficit now stands at 0.38% of GDP, with the central government reporting a deficit of 0.37% for the same period. President Luiz Inacio Lula da Silva’s administration has set a target of achieving a zero primary deficit for the year, with a permissible margin of 0.25% of GDP either way.
In summary, Brazil’s gross debt-to-GDP ratio fell unexpectedly in January, signaling better-than-anticipated public sector performance. This improvement is primarily due to net debt redemptions and growth in nominal GDP. The country also recorded a primary surplus, moving towards the government’s goal of achieving a zero primary deficit by year’s end.
Original Source: www.tradingview.com
