Brazil's central government primary deficit rises in June, 12-month surplus within target

BRASILIA, July 30 (Reuters) - Brazil's central government posted a primary budget deficit of 44.296 billion reais ($7.92 billion) in June, Treasury data showed on Wednesday, up 8.6% in real terms from a year earlier.

The increase stemmed from a 1.6% inflation-adjusted rise in government spending, while net revenue edged down 0.1% in the period.

Over the past 12 months, Latin America's largest economy posted a primary surplus - excluding interest payments - of 15.3 billion reais, equivalent to 0.11% of gross domestic product (GDP).

The result remains within the official target of a zero deficit, with a tolerance band of 0.25% of GDP in either direction.

The improvement in the annual figure was largely driven by the postponement of around 70 billion reais in court-ordered payments to July, after most of those obligations were settled in early 2024.

On the other hand, according to the Treasury, the main driver of higher primary spending in June was increased pension and social benefit outlays, including the BPC program for low-income elderly and disabled citizens.

The rise was "largely explained by the real increase in the minimum wage and growth in the number of beneficiaries," it said.

($1 = 5.5946 reais)