UPDATE 1-Brazil primary surplus in line with IMF goals
Reuters, 07/26/2000 20:19
BRASILIA, July 26 (Reuters) - Brazil's central government posted a larger-than-expected primary surplus in June, virtually assuring the country met fiscal targets agreed with the IMF in the first half of the year, economists said Wednesday.
The treasury said the central government of Latin America's top economy posted a primary budget surplus of 1.46 billion reais ($820 million) in June.
That brought the accumulated primary surplus -- which excludes debt payments -- in the first half of the year to 15.117 billion reais, or 2.65 percent of gross domestic product, compared with 12.644 billion reais (2.63 percent of GDP) in the same period of 1999.
"What is clear with this number is that the fiscal target for the first half of the year has been reached," said Carolina Abreu, chief economist at Bandeirantes Bank in Sao Paulo.
In May this year, there was a primary central government surplus of 2.73 billion reais.
Under a loan agreement with the International Monetary Fund, Brazil is obliged to post a primary budget surplus for the whole public sector -- which includes the central government, states and municipalities -- this year of 36.77 billion reais, or 3.25 percent of GDP.
In the first half of the year, the public sector primary budget surplus needs to reach 16.175 billion reais.
Primary budget figures for the full public sector for the months of May and June will be released Thursday, but analysts get a fair indication of that data from the narrower central government budget surplus, which includes only the federal government, the pension system and the Central Bank.
The treasury said the decline in the central government primary surplus in the first half of this year compared with the same period of 1999 was largely due to spending cuts.
It said in a statement that spending in the first half of 2000 was down 0.9 percentage points of GDP compared with the first six months of last year.
Still, the smaller primary surplus in June than in previous months of this year was due to seasonal declines in revenues, above all in the CPMF financial transactions tax.
Copyright 2000, Reuters News Service |
