• Categories
  • Archives

Brazil’s US$ 42 Bi Surplus Not Enough to Pay US$ 71 Bi Interest on Debt

Last year the Brazilian government saved US$ 42.279 billion (93.505 billion reais), equivalent to 4.84% of the Gross Domestic Product (GDP) estimated for the period.

This result exceeded the government’s primary surplus target for the year (what the government saves to repay debt interest) by US$ 4.838 billion (10.7 billion reais). The target was US$ 37.416 billion (82.75 billion reais), or 4.25% of the GDP.

According to Altamir Lopes, head of the Central Bank’s Economic Department, this is the biggest surplus since 1994, when it corresponded to 5.21% of the GDP.

Lope informed that part of the increase reflects the contribution of states and municipalities. "The results of regional governments were very positive," he remarked.

The state and municipal primary surplus, US$ 9.641 billion (21.323 billion reais, or 1.10% of the GDP), was the largest since the statistic began to be calculated, in 1991.

Federal government-run enterprises also achieved a record-breaking surplus last year, of US$ 7.433 billion (16.441 billion reais).

In 2004 the government’s primary surplus was US$ 36.675 billion (81.111 billion reais), equivalent to 4.59% of the GDP.

Debt Interest

In 2005, the interest on Brazil’s debt came to US$ 71.054 billion (157.145 billion reais), equivalent to 8.13% of the Gross Domestic Product (GDP).

Since the primary surplus came to US$ 42.270 billion (93.505 billion reais), there was a US$ 28.776 billion (R$ 63.641 billion) deficit in the nominal balance in 2005, after interest payments are subtracted.

Commenting on these figures, the head of the Brazilian Central Bank’s Economic Department, Altamir Lopes, said that "this is the highest interest ever" on the debt.

"This has to do with the behavior of the interest rate," Lopes affirmed, recalling that the policy of raising the benchmark interest rate (Selic) over the course of last year had adverse effects on the part of the debt pegged to the Selic, which is set by the Central Bank.

Lopes explained that the government’s program for financing the debt has led to a significant decrease in the part of the debt pegged to foreign currencies, while increasing the portion linked to the Selic. "Moreover, the accumulation of debt by itself implies greater interest expenditures."

ABr

Tags:

  • Show Comments (2)

  • Guest

    That\’s the trick of this government !
    They say to their citizens that they reduced debts.
    They should have said they reduced FOREIGN debts BUT INCREASED BY FAR MORE THEIR DOMESTIC DEBTS.
    Even worse : they reduced their foreign debts that had lower interests rates than the
    rates on the new debts issued in local currency.

    This is simply what is called an AUTOGOAL !!!!!

    The government outstanding debts in fact increased from Reais 800 billions to 960 billions in 2005 alone.

    This is a “simple” increase in their total of 20 %….in 1 YEAR, at a time of budget austerity…as they said all along. NOT BAD.

    For 2006, an election year, suddenly, they are increasing their spendings…just to buy votes….despite Lula said not later than in December 2005, he will not use that trick.

    So anyone can guess by how much the Brazilian total debts will be further increased in 2006 !!!!
    The percentage increase for 2006 should easily surpass the 20 % of 2005.

    That is not a reduction in owed debts…as Lula, Palocci and Meireles, are explaining daily in their comments !

    Lies, manipulation of numbers, hidden facts,
    promises not fullfilled, corruption at the highest rate ever, has been the constant facts of the failure of this government.

    Hopefully brazilians citizens will wake up and think twice, on the election day !

  • Guest

    Does it really matter?
    Brasil, Brazil, whatever, will never pay its interest, let alone even to think ot tackling the principal. 10’s of billions of dollars in surplus is just more money to line the pockets of the politicians and police. When travelling to Braszil, remember, the police all speak english, and know exactly 4 words “do you have money”. This article is a waste of space and bandwidth.

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Varig Worker Union Files Suit Against Sale of Brazilian Airline

Brazil’s Infraero, the state-run airport administration agency, reports that yesterday morning alone, June 28, ...

Brazil Ready to Produce Bird Flu Vaccine in Two Months

Isaias Raw, president of the Butantã Institute, in São Paulo, informed that within 60 ...

Brazil Opposition Betting São Paulo Will Help Them Make the Next President

When Brazilian opposition party Senator Aécio Neves officially kicked off his presidential campaign, he ...

Brazil’s Lula Signs Law to Bar Chinese Goods

Brazilian President Luiz Inácio Lula da Silva signed into law regulations for the use ...

In Brasília Assemblymen Get Busy Trying to Prevent a Federal Intervention

The assemblymen in the Federal District Legislative Assembly (CLDF) are hard at work to ...

Now, Brazil’s Justice Minister Gets Involved in Corruption Scandal

Brazilian Justice Minister Márcio Thomaz Bastos denied any links to the scandal that a ...

Trying to Gag Lula

By creating phony crises, the media is falling into the hands of those who ...

Brazil Destroys Half a Million CDs to Celebrate Anti-Piracy Day

Brazil is celebrating the National Anti-Piracy Day, today, with a ceremony in the capital ...

Brazil’s Arab Summit Will Decry Terrorism

The final document of Brazil’s Summit of South American – Arab Countries to be ...

Brazilian Authorities Backtrack and US Pilots Are Threatened with Jail

Two hours of conversations by two American pilots between themselves and with the air ...