UPDATE 1-Brazil 2015 budget gap hits record as austerity fails

viernes 29 de enero de 2016 10:55 GYT
 

(Adds overall deficit, analyst comment and data)

By Alonso Soto

BRASILIA Jan 29 (Reuters) - Brazil's overall budget deficit soared to a record 613 billion reais ($150.99 billion) in 2015, central bank data showed on Friday, nearly doubling from last year as efforts to rebalance fiscal accounts failed and interest rates shot up.

The budget deficit equaled 10.34 percent of the gross domestic product, nearly five times its shortfall in the 12 months to mid-2011. The deficit mushroomed under President Dilma Rousseff, who took office at the start of 2011.

In comparison, at the height of its debt crisis in 2009 Greece had a deficit of 15.2 percent of GDP.

Brazil's widening budget deficit is fueling worries among investors that the once-booming economy may struggle to repay its debt in coming years as a deepening recession cuts revenues. On the other hand, high inflation has forced authorities to raise interest rates, the rate that the government pays some investors who purchase its debt.

Measures to cut spending and raise revenues failed to provide enough savings to close the widening budget gap under pressure from rising law-mandated expenditures linked to health and education

The closely monitored primary budget balance, or revenues after expenditures prior to debt interest payments, ballooned to a record 111.249 billion reais ($27.4 billion) in 2015.

The country posted a primary deficit of 71.729 billion reais ($17.6 billion) in December, above market expectations for a gap of 65.15 billion reais.   Continuación...