October 30, 2019 / 7:09 PM / 21 days ago

UPDATE 1-Brazil national debt to hit new peak 81.8% of GDP by 2022 - Treasury

(Adds details of data, bylines)

By Marcela Ayres and Jamie McGeever

BRASILIA, Oct 30 (Reuters) - Brazil’s national debt is expected to continue rising in the coming years, peaking at a new all-time high of 81.8% of gross domestic product in 2022 before reversing course the year after, the Treasury said on Wednesday.

The most recent figures show gross debt, incorporating the central government, states, municipalities and the social security system, hit a record 79.8% of GDP in August thanks to higher interest payments and borrowings, and a weaker exchange rate.

September’s data from the central bank will be published on Thursday.

In a press release accompanying the government’s latest primary deficit figures, Treasury said these projections were based on its spending ceiling rule remaining in place, primary budget surpluses by 2023, and GDP growth of 2.5% from 2021 on.

In Wednesday’s data, the central government posted a primary budget deficit of 20.37 billion reais ($5 billion) in September, slightly narrower than the 22.1 billion reais deficit median forecast in a Reuters poll of economists.

That was 14% narrower in real terms than the same month last year, the Treasury said. In the first nine months of this year, the accumulated deficit before interest payments are taken into account stood at 72.47 billion reais, 14.5% narrower in real terms.

Once again, social security payments accounted for the lion’s share of the deficit, rising 3.5% to 33.52 billion reais in September from the same month a year ago. So far this year, Brazil’s social security expenditure is up 2.7% to 165.25 billion reais, Treasury said.

The primary deficit in January-September this year was 1.4% of GDP, Treasury said, compared with 2.6% in the same period last year, reflecting the government’s drive to freeze or cut non-essential spending across the board.

In the 12 months to September, the accumulated primary deficit stood at 111.8 billion reais. The government’s goal for 2019 is a deficit of around 139 billion reais.

$1 = 4.02 reais Reporting by Jamie McGeever; Editing by Richard Chang

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