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CORRECTED-UPDATE 1-Brazil primary budget deficit widens more than expected in Feb
March 31, 2017 / 6:39 PM / 4 months ago

CORRECTED-UPDATE 1-Brazil primary budget deficit widens more than expected in Feb

2 Min Read

(Corrects net debt as percentage of GDP to 47.4 pct from 2.34 pct in last paragraph)

BRASILIA, March 31 (Reuters) - Brazil posted a primary budget deficit of 23.5 billion reais ($7.50 billion) in February, central bank data showed on Friday, above market expectations for a gap of 19 billion reais as a slow recovery weighs on the government's public accounts.

The country recorded an overall budget deficit, which includes debt interest payments, of 54 billion reais in February.

Disappointing tax intake stemming from a painfully slow economic recovery has undermined President Michel Temer's efforts to reduce a ballooning budget deficit that cost Brazil its coveted investment-grade rating in 2015.

Earlier this week, Temer announced an aggressive spending freeze to meet its primary deficit target of 139 billion reais. His center-right government resisted pressure to hike taxes further and is instead relaying on the spending freeze and one-off revenue to rebalance its accounts.

The government said the hefty deficit in February was also due to the transfer of federal taxes to states and municipalities as well as an increase in pension benefits.

Net debt as a percentage of GDP stood at 47.4 percent February. Gross debt increased to 70.6 percent of GDP from 69.7 percent the previous month. ($1 = 3.1324 Brazilian reais) (Reporting by Marcela Ayres; Writing by Alonso Soto; Editing by Matthew Lewis and Bill Trott)

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