UPDATE 2-Brazil posts record primary gap in August as tax intake drops

viernes 30 de septiembre de 2016 10:48 GYT

(Adds central bank debt estimates for 2016 and background)

By Marcela Ayres

BRASILIA, Sept 30 (Reuters) - Brazil posted its biggest primary budget deficit in August, central bank data showed on Friday, reflecting the dire state of the country's finances.

The primary deficit of 22.267 billion reais ($6.88 billion) in August was well wider than market expectations for a gap of 18.5 billion reais. Central bank data showed it was the biggest deficit for that month in a historic series that began in 2001.

The deficit, the seventh so far this year and the second biggest after February, stems from a sharp drop in tax revenue that led the central government primary balance, which does not include states' budget results, to post a record gap of 20.3 billion reais for that same month.

Federal tax revenues fell 10.12 percent in August as a recession in its second year hampered consumption.

So far this year, the country has accumulated a primary deficit of 58.859 billion reais, which is about 36 percent of the 2017 official goal for a deficit of 163.9 billion reais.

The primary balance, or the budget result prior to interest debt payments, is a key indicator of a country's capacity to repay it debt.

The overall budget deficit, which includes interest debt payments, continues to hover around 10 percent of the gross domestic product in the 12 months through August.   Continuación...