UPDATE 2-Brazil central government surplus recovers on extra revenue

jueves 25 de febrero de 2016 15:05 GYT
 

(Recasts first sentence with financial context, adds extraordinary income from sale of power rights, financial details)

BRASILIA Feb 25 (Reuters) - Brazil's central government finances returned to positive territory in January after eight months in the red, but the respite coming from a surge in extraordinary revenues may prove to be temporary as a deepening recession curbs income.

The central government posted a primary budget surplus of 14.835 billion reais ($3.77 billion) in January, up from a record deficit of 60.72 billion reais in December and a surplus of 10.420 billion reais in January 2015.

The central government account, which covers federal ministries, the central bank and social security, had been expected to post a surplus of 9.6 billion reais, according to the median forecast in a Reuters poll of 10 economists.

The better-than-expected results stemmed from the sale of the rights in 29 hydroelectric plants that generated nearly 11 billion reais in extra income for the government.

For the rest of the year revenue is expected to continue its steep fall as the once-booming economy enters its second year of contraction. Federal revenue fell 6.7 percent in January in its steepest drop for that month since 2011.

The government is considering lowering its fiscal target to a primary deficit of up to 1 percent of gross domestic product from its original target for a surplus of 0.5 percent.

The country's widening overall deficit, which topped 10 percent of GDP last year, has already cost Brazil its investment grade rating.

Moody's on Wednesday cut Brazil by a surprising two notches to "junk" territory, the last of the big three rating agencies to strip Brazil of its investment grade. ($1 = 3.9368 Brazilian reais) (Reporting by Marcela Ayres; Writing by Alonso Soto; Editing by James Dalgleish and Matthew Lewis)