Brazil Aug primary surplus down more than forecast

Sep 26, 2007 - Brazil's consolidated primary budget surplus fell more than expected in August from a year earlier as government spending grew and profits at state-owned companies declined, government data showed on Wednesday.

The primary surplus fell to 8.09 billion reais ($4.37 billion) in August from 13.18 billion reais in August a year ago, the central bank said.

The result was much lower than the 12.75 billion reais median estimate of 14 economists in a Reuters poll. The estimates ranged from 9.8 billion reais to 13.7 billion reais.

In July, the government had a primary surplus of 7.9 billion reais.

In the 12 months through August, the primary surplus was equal to 4.12 percent of gross domestic product compared with 4.35 percent of GDP in the 12 months through July.

The primary surplus, which excludes interest payments, is closely watched by investors as a gauge of a country's ability to service its debt.

The overall budget including interest payments resulted in a deficit of 2.85 billion reais in August, compared with a gap of 2.38 billion reais in August a year ago.

The overall deficit, referred to in Brazil as the nominal budget deficit, fell sharply from 6.18 billion reais in July.

Net public sector debt edged down to 43.1 percent of GDP in August from 44 percent in July.