UPDATE 1-Brazil primary surplus shrinks in July, target at risk
* Brazil primary surplus 2.3 bln reais in July
* Markets expected surplus of 6 billion reais
* Surplus in last 12 months equivalent to 1.91 pct of GDP
BRASILIA, Aug 30 (Reuters) - Brazil's July primary budget surplus fell from June as government revenue dropped, central bank data showed on Friday, throwing some doubt on whether the country will be able to meet a key fiscal saving target this year.
The country posted a primary surplus of 2.3 billion reais ($975.8 million) in July. The primary budget balance, which represents the public sector's excess revenue over expenditures before debt payments, was expected to reach a surplus of 6 billion reais, according to the median forecast of 12 analysts surveyed by Reuters. The country had a primary surplus of 5.429 billion reais in June.
President Dilma Rousseff's government reduced this year's goal to 2.3 percent of GDP as a sharp economic slowdown and a flurry of tax breaks caused a sharp drop in revenues. The target initially set for 2013 was 3.1 percent of GDP.
The Brazilian government on Thursday set a lower primary budget surplus goal for 2014 in an attempt to be more transparent about its finances, but economists say that goal could also be too ambitious.
In the 12 months through July, the primary surplus was equivalent to 1.91 percent of GDP.
The primary balance is a gauge closely watched by investors because it measures a country's ability to service its debt. The government missed its primary surplus target in 2012 and will miss it again this year as a slew of tax breaks aimed at reviving the economy hits revenues. The country posted a nominal budget deficit of 21.1 billion reais in July.
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