Brazil's government deficit jumps in July, 12-month deficit misses target

BRASILIA, Aug 28 (Reuters) - Brazil's government posted a primary budget deficit of 59.124 billion reais ($10.9 billion) in July, Treasury data showed on Thursday, more than six times the deficit from the year-earlier period but close to analysts' estimates.

The increase stemmed from a 28.3% inflation-adjusted rise in government spending, driven mainly by court-ordered payments and pension benefits. Meanwhile, net revenue rose 3.9% in the period, helped by higher tax collection.

Analysts polled by Reuters expected a primary deficit of 58.55 billion reais.

The primary deficit last month was the worst for the month of July since 2020, when it hit 120.6 billion reais in inflation-adjusted terms due largely to high expenses tied to the COVID-19 pandemic.

The year-over-year jump in the deficit was boosted by the postponement of government court-ordered payments to July. Last year, those payments had been made in the first half of the year.

The 12-month deficit reached 34.1 billion reais, equivalent to 0.3% of gross domestic product, the data showed, missing the government's official target for 2025 of a zero-figure deficit, with a tolerance band of 0.25% of GDP in either direction.

($1 = 5.4212 reais)