Primary Deficit of Public Sector Improves but Nominal Deficit Grows in August

In August, the consolidated public sector posted a primary deficit of R$ 10.012 billion according to data released by the Central Bank. This is an improvement compared to the same period last year when the deficit was R$ 17.255 billion. Analyzing different segments, the central government recorded a deficit of R$ 14.687 billion, while states and municipalities achieved a surplus of R$ 2.688 billion. State-owned enterprises (SOEs) had a modest surplus of R$ 1.987 billion. Looking at the 12-month period up to August, the primary deficit totaled R$ 82.077 billion, equivalent to 0.62% of GDP. This is an improvement from the 0.67% of GDP recorded in the same period last year. However, the nominal deficit was higher at R$ 115.946 billion with interest costs amounting to R$ 105.934 billion. One year ago, the nominal deficit was R$ 91.516 billion. The liquid debt of the non-financial public sector stood at 69.3% of GDP in August, compared to 69.1% in July. These figures reflect a complex economic reality where primary fiscal discipline is still a challenge, but interest rates remain a key fiscal pressure factor.