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Brazil: Public accounts registered a deficit of US$ 47.4 billion in 2023

Ignacio Teson•Tuesday, February 13, 2024•2 min read

Brazil: Public accounts registered a deficit of US$ 47.4 billion in 2023

It’s equivalent to 2.12% of the GDP. This result represents the worst performance since 2020.

Public accounts recorded a deficit of R$ 230.5 billion (U$ 47.4 billion) in the first year of Luiz Inácio Lula da Silva’s government (PT) in 2023, equivalent to 2.12% of the Gross Domestic Product (GDP). However, excluding COVID-19 years from the analysis, this has been the worst year since 2015.

In comparison, only the second term of Dilma Rousseff’s presidency (PT) had a worse outcome in the first year of her administration. In 2015, the deficit was R$ 183.1 billion (US$ 37 billion).

The result in 2023 was worse than the informal target set by Minister Fernando Haddad, the Minister of Economy, who promised to present a deficit of up to 1% of the GDP in the first year of the administration.

This occurs in a context where it was revealed this week that there are at least 10,000 public servants holding obsolete positions in Brazil.

Professions such as butcher, cowboy, recreation worker, and crafts seller are not usually associated with the public sector.

However, at least 10,000 employees in the federal Executive, or 2% of the total permanent workforce, hold positions in functions like these, ranging from obsolete areas such as videotape editor to others currently performed by subcontractors, such as cooks.

Currently, Brazil’s long-term bond yield stands at 10.75%, reflecting growing distrust in its long-term repayment capacity. While its currency remains stable, the Brazilian real has suffered significant inflation in recent years.

Brazil’s political instability threatens both its fiscal accounts and potential repayments of its external debt, which are mostly denominated in US dollars.

According to most media outlets, the President of Brazil plans to reduce the 250 pay tables and over 300 career groupings to a more “rational” number, yet to be determined.

According to the secretary, the department will have to publish a resolution this month with guidelines to guide this process and seek the adherence of agencies and employees throughout the term.

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ABOUT THE AUTHOR See More
Ignacio Teson
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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