Brazil govt debt falls to 84.5% of GDP in May, lowest in almost a year

BRASILIA: Brazil's public finances improved across the board in May, official figures showed on Wednesday, as the budget deficit shrank to a year low and government debt fell to its lowest as a share of the overall economy in almost a year.

Government debt fell to 84.5% of gross domestic product in May, central bank figures showed, the lowest since July 2020 and down from 85.6% the month before.

Net public-sector debt also fell in May, to 59.7% of GDP from 59.8% the month before, the lowest since August.

Stronger-than-expected tax revenues in recent months have helped brighten the outlook for Brazil's public finances, so much so that Economy Minister Paulo Guedes said last month that the overall budget deficit could swing to surplus in 2023.

Guedes said last week that Brazil's debt-to-GDP ratio should close this year at 84%.

The central bank's figures on Wednesday showed that the public sector registered a deficit in May excluding interest payments of 15.5 billion reais ($3.1 billion), less than the 23.7 billion reais deficit forecast in a Reuters poll of economists.

The nominal deficit in the month including interest payments was 37.4 billion reais, the central bank said.

The accumulated primary deficit in the 12 months through May was 428.6 billion reais, or 5.4% of GDP, the smallest deficit since May 2020 and below a downwardly revised 7% of GDP in the year through April, the central bank said.

The nominal deficit including interest payments in the year through May was 724.3 billion reais, or 9.1% of GDP, the central bank said, compared with 827.2 billion reais, or 10.6%, of GDP the month before.