Public accounts closed the month of November with a primary deficit around 80% lower than that recorded in the same month of 2023. The consolidated public sector – made up of the Union, states, municipalities and selected state-owned companies – had a negative balance of R R$6.6 billion last month, compared to a deficit of R$37.3 billion in November last year.
The November 2024 deficit is the smallest since 2021, when public accounts recorded a surplus of R$15 billion in November. Year to date, public accounts have accumulated a deficit of R$63.2 billion, which represents 0.59% of the Gross Domestic Product (GDP).
Brazilian public sector fiscal statistics for November were released this Monday (30) by the Central Bank (BC). This calculation excludes financial companies linked to the State, such as BNDES, Caixa Econômica Federal and Banco do Brasil. The calculation also does not take into account Petrobras’ revenues. Furthermore, the primary deficit also does not calculate debt interest expenses.
In the Central Government and selected state-owned companies there were deficits of around R$5.7 billion and R$1.3 billion, and in regional governments, a surplus of R$405 million.
Public debt
The country’s monetary authority also reported that the general government’s gross debt (DBGG), which accounts for the liabilities of federal, state and municipal governments, stood at 77.7% of GDP in November, that is, R$9.1 trillion. of reals.
There was a reduction of 0.1 percentage point (pp) in GDP compared to the previous month. In December 2023, the debt was 73.8% of GDP, according to the BC. The main factor that drove the 3.9 pp growth in debt in relation to GDP this year was nominal interest (+6.9 pp), followed by net debt issuance (+0.7 pp).
At the last meeting of the year, on December 11, the Monetary Policy Committee (Copom) increased the Selic rate, the basic interest rate for the Brazilian economy, by 1 percentage point, to 12.25% per year. Financial consultancy MoneYou calculates that Brazil has the second highest real interest rate in the world, second only to Turkey.
Interest expenses
In November this year, Brazil spent R$92.5 billion on nominal interest, compared to R$43 billion spent in November 2023. According to the BC, “this increase was influenced by the result of foreign exchange swap operations (loss of R$20.3 billion in November 2024 and a gain of R$18.3 billion in November 2023)”. The currency swap is equivalent to selling dollars on the market to try to contain the rise of the US currency.
In the twelve months up to November this year, nominal interest reached R$918.2 billion (7.85% of GDP), compared to R$713.4 billion (6.56% of GDP) in the twelve months up to November 2023.
