August 29, 2019 / 3:40 PM / 3 months ago

UPDATE 1-Brazil Treasury sees 2019 deficit 15-20 bln reais below target

(Adds detail, comment)

By Jamie McGeever

BRASILIA, Aug 29 (Reuters) - Brazil is on course to comfortably meet its 2019 fiscal targets, Treasury Secretary Mansueto Almeida said on Thursday, as figures showed that the government’s primary budget deficit narrowed last month.

The government has made bringing public spending and the deficit under control its main economic priority, a precondition, it says, for boosting investor confidence, consumer and business spending, and ultimately economic growth.

Figures on Thursday showed that the central government’s budget deficit before interest payments are taken into account narrowed to 6 billion reais ($1.45 billion), as revenue growth outstripped increases in spending.

That was almost exactly in line with the 5.965 billion reais deficit median forecast in a Reuters poll of economists, and was 22.4% narrower in real terms than the same month last year, Treasury said.

Speaking to reporters in Brasilia, Almeida said the 2019 deficit could even come in 15-20 billion reais lower than the official target of 139 billion reais, expected to be 1.94% of gross domestic product.

“I think the primary result at the end of the year will be 15-20 billion better than the target, but I cannot reallocate this, give it to another ministry or spend elsewhere,” Almeida said.

In the first seven months of this year, the accumulated primary deficit stood at 35.25 billion reais, 13.4% narrower in real terms, while the 12-month accumulated deficit stood at 118.5 billion reais, or 1.66% of GDP.

Brazil’s government scored a major victory last month when the lower house of Congress overwhelmingly backed a pension reform bill, which, if passed into law, will save the public purse almost 1 trillion reais in the next decade.

The social security deficit in July was 16.11 billion reais, 7.3% larger in real terms than July last year. But in the January-July period this deficit totaled 111.11 billion reais, only 1.1% wider than a year ago in real terms. ($1 = 4.15 reais) (Reporting by Marcela Ayres Writing by Jamie McGeever Editing by Marguerita Choy)

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