Central government gross debt falls in August, BC points out

The General Government Gross Debt (DBGG), which corresponds to the accounts of the Federal Government, INSS and state and municipal governments, registered a drop of 0.7 percentage point in August, registered at 77.5% of GDP. Year-to-date, the debt recorded a reduction of 2.8 percentage points.

The data were released this Friday (30) in the Central Bank’s Fiscal Statistics note. According to the autarchy, the fall in the DBGG “resulted from the growth of nominal GDP, net debt redemptions, the effect of the accumulated exchange rate appreciation and the appropriate nominal interest.

Deficit

The consolidated public sector recorded a deficit of R$30.3 billion in August 2022, compared to a surplus of R$16.7 billion in August of the previous year. The result was driven by the deficit of R$ 49.8 billion of the Central Government.

The consolidated public sector includes central government accounts (Treasury, Central Bank and Social Security), states, municipalities and state-owned companies and does not include interest expenses.

The primary result for August was influenced by the negative result of the federal government, while the data was in the blue for regional and state governments.

Among regional governments, the surplus was R$ 18.5 billion, while state-owned companies recorded a surplus of R$ 970 million. In the twelve months ended in August, the primary surplus of the consolidated public sector reached R$ 183.5 billion, equivalent to 1.97% of GDP.

This Thursday (29), the National Treasury had informed, in the release of the National Treasury Result of August, the deficit registered in the month and explained that two expenses influenced the result.

According to the Treasury, in August 2022 there was an extraordinary expense of R$ 23.9 billion, referring to the Union agreement with the municipality of São Paulo on the Campo de Marte airport. In addition to the expenses arising from the agreement with the capital of São Paulo, the Treasury disbursed R$ 25.3 billion for the payment of judicial precatories.

nominal interest

In the month of August, the nominal interest of the consolidated public sector – central, regional and municipal governments, appropriated by competence, totaled R$ 35.6 billion. In the same month of 2021, nominal interest was BRL 46.5 billion.

According to the BC, “the improvement in the result of foreign exchange swap operations (a gain of R$11.3 billion in August 2022 and a loss of R$7.6 billion in August 2021) contributed to the reduction in interest rates in the period.

In the last twelve months, nominal interest amounts to R$ 575.6 billion (6.17% of GDP). The result represents an increase when compared to the last twelve months until August 2021, when interest was registered at R$ 335.7 billion (4.03% of GDP).