BRASILIA, June 29 (Reuters) – Brazil’s central government posted a 26.3% rise in its primary deficit in May from a year earlier, Treasury data showed on Monday, driven by higher spending, particularly on pensions.
The monthly shortfall reached 53.257 billion reais ($10.31 billion), broadly in line with the 53 billion reais deficit forecast by economists in a Reuters poll.
In the 12 months through May, the deficit totaled 142.3 billion reais, equivalent to 1.06% of gross domestic product, versus a government target for a 0.25% primary surplus this year, with a tolerance band of plus or minus 0.25 percentage points of GDP.
According to the Treasury, the result reflected a real 9.4% increase in total spending, outpacing a 5.5% rise in net revenue, which has been supported by strong tax revenue, with record monthly collections in all months this year.
The government said the main driver of spending growth was higher outlays on pensions.
($1 = 5.1663 reais)
(Reporting by Marcela Ayres; Editing by Kevin Liffey and Paul Simao)
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