Brazil Creates Record 1.5 Million Jobs But Primary Surplus Is Lowest Ever

construction_brazilBrazil has created a total of 212,952 registered jobs in June, according to reports from the Brazilian Ministry of Labor’s Caged. the General Register of Employed and Unemployed.

This was the second best result for the month since Caged began compiling these data in 1992.  However, it was less than the 298,000 jobs created in May this year and interrupted a series of five consecutive months of job growth.

The June 2010 job numbers are lower only than June 2008 (309,000), but higher than June 2004 (208,000)

For the first half of this year (January to June) the total of new jobs created was 1,473,000, a new record. The former record was in 2008 – before the Great Recession.

Federal Tax

The tax collectors in Brazil raked in 61.488 billion reais in June. When the amount is corrected by the Broad Consumer Price Index (IPCA), which is the government’s inflation yardstick, that is an increase of 8.54% over tax revenue in June 2009.

However, the comparison of the two months is unequal given that a year ago Brazil was feeling the effects of the Great Recession along with the rest of the world.

Even so, a comparison of the first half of this year and the same period in 2009 shows that tax revenue is up 12.48%.

The Brazilian IRS (Receita Federal”) says the numbers demonstrate a recovery of the country’s principal macroeconomic indicators, such as industrial output, up 14.08%; general volume of sales, up 9.50%; and salary mass, up 14.49%.

And, the strong showing (June tax revenue) it must be pointed out, was actually a reflection of economic performance in May. On the other hand, some tax specialists point out that total 2010 tax revenue may increase by over 12%, compared to 2009. And the total burden of federal, state and municipal taxes in Brazil are headed for a record of over 37.5% of GDP.

Central Bank’s Bad Times

The head of the Economic Department at the Central Bank, Altamir Lopes, says that two factors will improve the primary account in the near future: more tax revenue and cuts in government spending.

Lopes spoke after the “consolidated” primary surplus in May came in at 1.43 billion reais, the lowest since 1991 when records began. 

Meanwhile, the National Treasury released its primary account figures,  which is calculated differently, showing a deficit of 509.7 million reais, the worst result since 1999.

Altamir Lopes said that over the next few months two things will happen. The primary surplus will rise and the Central Bank and National Treasury figures will converge.

ABr

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