BRASILIA (Reuters) – Brazil’s central government met its 2024 primary budget target, Treasury data released on Thursday showed, defying more pessimistic market forecasts with the support of one-time revenues that may not recur.
The primary budget deficit of 43 billion reais ($7.31 billion) was equivalent to 0.36% of gross domestic product.
However, the deficit stood at 0.09% of GDP, excluding 32 billion reais in expenditures not considered by law in the goal calculation, such as costs related to unprecedented flooding in the state of Rio Grande do Sul.
As a result, President Luiz Inacio Lula da Silva’s leftist administration achieved its target of a zero primary deficit, with a 0.25% tolerance margin, meaning the maximum shortfall was 28.8 billion reais.
At the beginning of 2024, economists surveyed weekly by the central bank had forecast a primary deficit of 0.8% of GDP, but they revised their estimate to a 0.5% deficit in the year’s final poll.
The primary surplus was 24 billion reais in December.
Fiscal performance was supported by strong real growth in tax revenues, larger dividend payments from state-owned companies, and the early payment of some 2024 expenses in 2023, including part of the government’s heavy court-ordered payments bill.
Many critics argue that the result is not sustainable and that challenges remain in meeting the 2025 target, which again calls for a zero primary deficit with the same 0.25% tolerance margin.
($1 = 5.8814 reais)
(Reporting by Marcela Ayres; Editing by Richard Chang)
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