Brazil's national debt hits record high 79.7% of GDP in April
- 29 May 2020
Brazil’s national debt and public sector deficit ballooned to record levels in April, official figures showed on Friday, clear signs of the toll the coronavirus crisis is having on the country’s finances, APA reports citing Reuters.
Treasury and Economy Ministry officials have warned that both will continue to hit new highs in the months ahead as the steep economic decline batters tax revenues and prompts emergency government spending to limit the damage.
Central bank figures on Friday show April was the first month to fully reflect the effect of the crisis.
The national debt rose to a record 79.7% of gross domestic product, slightly less than expected, while the country’s net debt position at the end of last month rose to 52.7% of GDP, more than expected and the first rise this year.
The government last week revised its 2020 debt and deficit forecasts, and said it now expects the national debt to reach 93.5% of GDP this year.
But that is based on its assumption that GDP contracts by 4.7%, which is already looking optimistic. The median estimate in a Reuters poll of economists points to a record 6.3% contraction.
The overall public sector posted a primary budget deficit excluding interest payments of 94.3 billion reais ($17.5 billion) in April, the central bank said, less than the 118.6 billion reais deficit forecast in a Reuters poll but still the largest shortfall on record.
As a share of GDP over the 12 months to April the primary deficit widened to 2.25% from 0.9% in the 12 months to March. That was the widest deficit since November 2017.
The government said last week it now expects a broad public primary deficit this year of 708.7 billion reais, or 9.9% of GDP, assuming emergency measures yet to be approved are officially given the green light.