The reduction was led mainly by a nominal increase in GDP, It is also affected by inflation.
Economists surveyed weekly by the central bank are now estimating a 3% rise in GDP from 2022, after beginning last year by forecasting a mild 0.3% growth.
Latin America’s largest economy has shown more strength than initially expected thanks to strong activity in services, the improvement of the labor market and the fiscal stimulus of the Government before the presidential elections of October.
But the impressive reduction in gross debt was also helped by net public debt write-downs, as the Treasury opted to reduce bond issuance, while Brazil’s benchmark interest rate was raised aggressively to fight inflation. .
The advance payment of the debts of the state development bank BNDES with the Treasury also contributed to reducing the need to issue bonds, as well as the government’s own primary result.
The country’s public sector registered a primary deficit of 11.8 billion reais (2.3 billion dollars) in December, but a surplus of 126 billion reais for 2022, its second consecutive positive annual result and the best result for a year since 2011.
The strong annual result came just two years after 2020’s record deficit of 703 billion reais, buoyed by pandemic spending.
The 2022 result was mainly due to the primary surplus of 64.9 billion reais of states and municipalities. For its part, the central government registered a surplus of 54.9 billion reais, and state-owned companies a surplus of 6.1 billion reais.
Source: Ambito
