The Brazilian government’s primary surplus from January to July reached US$ 12.853 billion (37.980 billion reais). The target set in the Budget Guidelines Law (LDO) was US$ 11.201 billion (33.1 billion reais).
According to the head of the Secretariat of the National Treasury, Joaquim Levy, in spite of the good performance it is still too early to know whether or not it will translate into more resources for government discretionary spending.
He pointed out that the tendency is for monthly primary surpluses from now until the end of the year to be smaller. “It is possible that in December we will have a deficit,” declared Levy, adding that expenditures seasonally rise in the second half.
In July the primary surplus was US$ 1.232 billion (3.641 billion reais), compared to US$ 1.924 billion (5.684 billion reais) in June.
The year-end target for the primary surplus is US$ 13.909 billion (41.100 billion reais), or 2.45 percent of GDP.
Levy said the GDP growth rate target of 3.5 percent this year would be reached. He pointed out that foreign investments were strong and the stock market was on the rise.
“That is a good indicator,” he said. Levy said growth in 2005 would have a good spring board in this year’s growth. “This is a matter of organizing the market, guaranteeing competition and establishing regulatory norms,” he declared.
Levy explained that last year government discretionary expenditures were only US$ 3.384 billion (10 billion reais) mainly because of inflation in 2002.