Temer ends 2016 with the biggest fiscal deficit in the country's history.
The central government (Treasury, Central Bank, and Social Security) ended 2016 with a primary deficit of R$ 154,255 billion, the third consecutive negative result and the worst ever recorded by the country; the deficit remained within the official target of a negative balance of R$ 170,5 billion for the year.
BRASILIA (Reuters) - The central government (Treasury, Central Bank and Social Security) ended 2016 with a primary deficit of 154,255 billion reais, the third consecutive negative result and the worst ever recorded by the country.
The deficit remained within the official target of a negative balance of 170,5 billion reais for the year, with extraordinary revenues of over 45 billion reais.
In December alone, the primary deficit was 60,124 billion reais, the Treasury announced on Monday, a better performance than analysts' projection of a deficit of 71,90 billion reais, according to a Reuters poll.
Reflecting the severe recession Brazil has experienced, total net revenues fell by 4,1 percent in real terms compared to 2015, to 1,088 trillion reais, even with the gross revenue of 46,8 billion reais obtained by the government from the program to regularize assets abroad.
Expenses, on the other hand, fell at a slower pace, by 1,2 percent on the same basis of comparison, to 1,242 trillion reais.
The highlight was other mandatory expenses, which include spending on subsidies and extraordinary credits, with a decrease of 22,3 percent in 2016. This movement was mainly due to the strong comparison base with 2015, the year in which the government regularized the payment of the so-called "fiscal maneuvers".
On the other hand, disbursements for social security benefits rose 7,2 percent compared to 2015, to 516,860 billion reais, according to the Treasury.
In a video comment, Finance Minister Henrique Meirelles stated that the central government's primary result was better than expected, and highlighted that the government made an effort to reduce outstanding payments by more than 37,5 billion reais last year.
In recent months, members of the economic team had already indicated that the central government's result would close 2016 slightly better than the target set for the year to compensate for the expected worse performance of states, municipalities, and state-owned enterprises.
For the consolidated public sector (central government, states, municipalities and state-owned enterprises), the target is a primary deficit of 163,9 billion reais in 2016.
(By Marcela Ayres)