Public Accounts Show Deficit of R$ 14.18 Billion in March, the Worst Result for the Month Since 2020

Public Accounts Recorded a Deficit of R$ 14.18 Billion in March This Year, According to Information Released by the Central Bank This Friday (28).

The result refers to the consolidated public sector, which includes the federal government, states, municipalities, and state-owned enterprises. The primary deficit occurs when spending exceeds revenue, disregarding interest on public debt. This number concerns investors and analysts who monitor the country’s payment capacity, as it represents one of the worst results for March since 2020.

Reflections of the Economic Crisis and the Financial Situation of the Country

Compared to the Gross Domestic Product (GDP), the situation is even more concerning, with a negative balance of 1.59% last month, the highest record for the month since the same period prior. The federal and state public accounts were mainly responsible for the result, with a deficit of R$ 9.71 billion and R$ 4.62 billion, respectively.

In the accumulated first quarter, the public accounts recorded a surplus of R$ 58.38 billion, or 2.31% of GDP. However, this amount represents a deterioration compared to the same period last year, when the balance was positive at R$ 100.61 billion (4.73% of GDP).

The nominal result of the public accounts, which incorporates interest on public debt – taking into account interest expenses and the action of the Central Bank in the dollar exchange rate – was negative at R$ 79.5 billion in March, which raises the nominal deficit over 12 months up to March to R$ 618.9 billion, or 6.11% of GDP. This number is monitored by credit rating agencies, which assess countries’ credit scores and directly influence financial investments.

Measures to Reverse the Situation and Balance the Public Accounts

To contain inflation, the institution raised the basic interest rate (Selic) to 13.75% per year – the highest rate in six years – which affected nominal interest expenses, totaling R$ 65.31 billion in March and R$ 693.64 billion in 12 months, according to the Central Bank. The gross public debt ratio remains stable at 73% of GDP in March, equivalent to R$ 7.39 trillion, after having recorded the same level in February.

With the increase in spending through the PEC and the need to restore the budget, the federal government has been pressured by the financial market to take measures to prevent an increase in public debt. In January, the economic team announced a package of measures to try to reduce the public accounts deficit this year, focusing mainly on increasing tax revenue. In March, the government presented the new fiscal framework, proposing rules for public accounts to replace the spending cap. The National Treasury estimates that public debt may exceed 80% of GDP by the end of Lula’s administration in 2026.