|
Government
presents 2004 Budget
On 31 August, the government submitted the 2005 Budget to Congress.
The government’s proposal anticipates that economic growth will
accelerate next year and help bolster tax revenues significantly. As
a result, total revenues are seen as reaching 457.4 billion reais (US$
144.7 billion), which represents a nominal spending increase over this
year of 11.6%. Expenditures are expected to grow at a lesser nominal
pace of 11.4% to 342.1 billion reais (US$ 108.3 billion).
Furthermore, finance officials hope to garner a primary surplus of 4.25%
of GDP next year, which is unchanged from this year’s figure.
The
primary fiscal surplus continued to grow in July. According to
Central Bank statistics, the surplus reached 6.6 billion reais (US$ 2.2
billion or 4.64% of GDP) in July, which was up 53.1% from the same month
last year and represented the highest surplus on record for July. As
a result, the annualized primary surplus rose to 74.6 billion reais (US$
25.2 billion or 4.69% of GDP) from 72.3 billion reais (US$ 24.4 billion or
4.54% of GDP) the prior month. As a result, the nominal public
sector deficit declined from 3.8% of GDP to 3.4% of GDP in July.
Consensus Forecast participants expect the fiscal deficit to narrow
further to 3.2% of GDP this year, which is up 0.2 percentage points from
last month’s forecast. Moreover, next year, the fiscal deficit is
seen as narrowing further to 2.3% of GDP.
Export
growth continues to boom at record levels
In August, exports grew 41.4% over the same month last year, which was
down moderately from the 47.3% expansion observed in the prior month.
Manufactured exports accounted for the lion share of the August figure,
particularly automobiles and automotive parts destined for the US and
Latin American market. Furthermore, semi-manufactured iron and steel
goods destined for Asia, in particular China, also continued to bolster
export growth in August considerably. As a result of the strong
August reading, annual exports reached US$ 88.9 billion, up from US$ 86.3
billion the prior month. Consensus Forecast participants expect
robust export growth to persist through the end of the year with total
annual exports seen rising to US$ 89.0 billion, which is up from US$ 88.5
billion expected last month. |
