Brazil Posts R$14.5 Billion September Primary Deficit as YTD Gap Reaches R$100.4 Billion

Overview

• From January to September, the primary result shows a R$100.4 billion deficit, with real net revenue up 3.5% and total expenditures up 2.8% versus a year earlier.
• September spending rose 5.7% in real terms, led by higher discretionary health outlays (+R$4.1 billion) and larger transfers to states and municipalities (+R$3.4 billion), and the monthly gap exceeded market expectations of roughly R$6 billion.
• Net revenue in September increased 0.6% in real terms to R$172.3 billion as payroll-related receipts grew 11.9% and IOF collection jumped 35%, while IPI revenue fell 21.5%.
• Brazil’s fiscal framework permits a tolerance of about R$31 billion plus the exclusion of R$43.3 billion in court-ordered precatório payments, allowing a deficit near R$74.3 billion without a formal breach.
• On a 12‑month basis, the primary deficit equals 0.32% of GDP, and September’s breakdown showed a Tesouro surplus of R$6.5 billion offset by a R$20.9 billion Previdência deficit and a small Central Bank shortfall.