The public sector will see the second largest deficit in history in 2023

The public sector will see the second largest deficit in history in 2023

The loss in public accounts was lower than in 2020, the year of the Covid-19 pandemic; Accounts worsened by R$257 billion

The unified public sector – made up of the federation, states, municipalities and state-owned enterprises – in 2023 recorded the second-largest primary deficit in history in the accumulated period from January to November. The gap in public accounts amounted to 119.6 billion Brazilian reais. The data was released on Friday (January 5, 2024) by B.C.E. (central bank).

Only the negative result did not extend beyond 2020, the first year of the Covid-19 pandemic, which pressured national and international governments to increase public spending to contain the effects of the health crisis.

The primary score is calculated by balancing revenues and expenses, excluding debt interest payments. A primary deficit means spending exceeds revenues, which could increase Brazil's debt trajectory.

According to British Columbia data, from January to November, the consolidated public sector recorded a fiscal deficit of R $ 651.1 billion. The result was atypical. It recorded surpluses of R$64.6 billion in the same months of 2021 and R$137.8 billion in 2022. Last year, it ran a deficit again in the January-November period.

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When comparing 2023 with 2022, the consolidated public sector worsened public accounts conditions by R$257.4 billion.

The public sector gap in 2023 is mainly due to central government accounts – made up of the federal government and the central bank. They had a deficit of R$137 billion in the January-November period. In other words, the smaller gap in accounts of R$119.6 billion was made possible by the negative balance in the accounts of states, municipalities and state-owned enterprises.

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About the Author: Camelia Kirk

"Friendly zombie guru. Avid pop culture scholar. Freelance travel geek. Wannabe troublemaker. Coffee specialist."

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