UPDATE 1-Brazil central gov't posts record deficit for October

jueves 26 de noviembre de 2015 16:38 GYT
 

(Adds Treasury chief comments and data details)

BRASILIA Nov 26 (Reuters) - Brazil's central government recorded its biggest primary budget deficit recorded for the month of October as a deepening recession drags down federal revenues, Treasury data showed on Thursday.

The central government account, which covers federal ministries, the central bank and social security, had a deficit of 12.28 billion reais ($3.27 billion) in October, nearly double the 6.9 billion reais gap recorded in September.

It is the sixth straight monthly primary gap for Brazil, which is expected to post a record consolidated deficit this year of 48.9 billion reais or the equivalent of 0.85 percent of gross domestic product. The consolidated balance includes results from states and municipalities and is scheduled to be released by the central bank on Monday.

President Dilma Rousseff is struggling to shore up the government accounts as a rebellious Congress drags its feet to approve unpopular cost-cutting measures.

The surprise arrest of the ruling coalition leader in the Senate, Delcidio do Amaral, on Tuesday will likely complicate Rousseff's austerity drive and could even revive calls for her impeachment.

Treasury chief Marcelo Saintive told reporters the government could be forced to freeze more than 100 billion reais in expenditures if Congress fails to approve a bill to cut the primary target by Monday.

Saintive said government efforts to cut spending were overshadowed by a sharp drop in tax revenues due to what is expected to be the country's worst recession in 25 years. The Brazilian economy is expected to contract 3.1 percent this year, according to a weekly central bank poll of economists.

The government's expenditures on pensions surged 37 percent to 45.8 billion reais in October from a year ago because of an additional annual monthly payment to retirees. ($1 = 3.7537 Brazilian reais) (Reporting by Alonso Soto; Editing by Jeffrey Benkoe and Eric Walsh)