October 31, 2019 / 1:51 PM / 12 days ago

UPDATE 1-Brazil posts smallest primary deficit as share of GDP in almost a year

(Adds detail)

By Jamie McGeever

BRASILIA, Oct 31 (Reuters) - Brazil’s public finances improved in September, central bank figures showed on Thursday, with the broadest measure of the government’s deficit as a share of the overall economy falling to its lowest level in almost a year.

The Brazilian government’s primary fiscal deficit of 20.54 billion reais ($5.2 billion) in the month was less than the 24.0 billion deficit economists had expected, and some 16% narrower than the same month a year ago.

That helped narrow the primary deficit in the year to September, comprising the central government, regional governments and state-owned enterprises before interest payments are factored in, to 1.29% of gross domestic product, the central bank said.

The figure was down from 1.36% in the 12 months through August, and the lowest since 1.25% in October last year.

In nominal terms, the primary deficit in the 12 months through September was 91.4 billion reais, keeping the government on track to meet its goal for the year of a 132 billion reais shortfall, the sixth consecutive year in the red.

The Treasury had said on Wednesday that the improvement in public finances was being helped by an increase in dividend payments from public sector banks to the government.

In the first nine months of the year, the consolidated public sector deficit was 42.5 billion reais, the central bank said on Thursday, some 28% smaller than 59.3 billion reais in the same period a year ago.

Brazil’s gross public debt fell to 79.0% of GDP from a record high 79.8% the month before, the central bank said, while net debt rose to 55.3% of GDP from 54.8% of GDP. That is edging closer to July’s 55.8%, the highest in over 16 years.

$1 = 3.97 reais Reporting by Jamie McGeever Editing by David Holmes

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