© Reuters. FILE PHOTO: The Paulista Avenue is seen from the Mirante do Sesc Avenida Paulista viewpoint, in Sao Paulo, Brazil July 5, 2023. REUTERS/Amanda Perobelli/File Photo

BRASILIA (Reuters) – Brazil’s public sector debt remained stable at 73.6% of its gross domestic product (GDP) in June despite a significant negative primary result for the month, showed central bank data on Friday.

Economists surveyed by Reuters had anticipated the Brazilian gross debt to rise to 74.0% of GDP.

In June, the public sector posted a primary deficit of 48.899 billion reais ($10.3 billion), exceeding the 42.75 billion reais estimated by economists in the poll.

The outcome represented a steep reversal from the 14.395 billion reais primary surplus recorded in the same month last year.

The central government was a major factor in driving this result, posting a 46.48 billion reais deficit due to declining revenues. Additionally, states and municipalities reported a deficit of 927 million reais, while state-owned companies faced a 1.492 billion reais shortfall.

Taking into account the payment of public debt interest, the overall result for the public sector showed a deficit of 89.625 billion reais in June, from 83.793 billion reais in the same month last year.

The central bank’s gain of 20.5 billion reais from foreign exchange swap operations offered some relief to the outcome, preventing a higher debt burden.

Over the course of 12 months, the nominal deficit expanded to 662.4 billion reais, equivalent to 6.42% of GDP.

($1 = 4.7419 reais)

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