Reuters: US Dollar Report: UPDATE 1-Brazil posts record primary budget surplus in January

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UPDATE 1-Brazil posts record primary budget surplus in January Feb 27th 2013, 14:13 Wed Feb 27, 2013 9:13am EST * Brazil posts primary surplus of 30.251 bln reais * Strong tax revenues boosted budget accounts By Alonso Soto BRASILIA, Feb 27 (Reuters) - Brazil posted a record primary budget surplus in January after a jump in revenues, central bank data showed on Wednesday, suggesting a slight improvement in fiscal accounts after dismal results last year and outpacing market expectations. The country posted a surplus of 30.251 billion reais ($15 billion) in January after a surplus of 22.25 billion reais in December, the central bank said on Wednesday. The result outpaced market expectations of a surplus of 22.8 billion reais. The country's result was pushed up by the central government's record surplus for January after an improvement in tax collection last month. The central government's primary surplus includes the federal government, central bank and social security results. The large primary surplus - or revenues minus expenditures excluding debt interest payments - comes at a time when the government plans to give billions of dollars in extra tax breaks in a bid to add momentum to a feeble economic recovery. The primary budget surplus is a gauge closely watched by investors because it measures a country's ability to service its debt. President Dilma Rousseff's government has already said it will not meet its overall primary surplus goal this year so that it can increase investments and help the economy. The country's missed its primary surplus goal by a wide mark in 2012. Rousseff's administration introduced legislation to allow the government to exclude up to 65 billion reais in investments and tax breaks from the annual primary surplus target of 155.9 billion reais or 3.1 percent of its gross domestic product. This would free the government to give more benefits to businesses and consumers as it considers eliminating federal taxes on staple foods and expanding payroll tax breaks, in a bid to curb inflation and revive a weak economic recovery. In the 12 months through January the primary surplus equaled 2.46 percent of GDP, up from the 2.38 percent posted in December. Brazil's overall budget balance, which includes interest payments, posted a surplus of 7.602 billion reais in January from a surplus of 3.15 billion reais in December. Link this Share this Digg this Email Reprints

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