(New throughout, adds comments from Treasury chief, and
BRASILIA, June 27 Brazil's central government in
May posted its widest-ever primary budget deficit for that
month, a surprise shortfall that raises further doubts about
whether President Dilma Rousseff can meet a key fiscal savings
goal this year.
The central government, which includes results from federal
ministries, the central bank and social security, posted a
primary deficit of 10.502 billion reais ($4.77 billion) in May,
the country's Treasury said on Friday.
There was a surplus of 16.6 billion reais in April due to a
surge in extraordinary revenues stemming from state companies'
dividends and concession premiums.
In the first five months of the year, the central government
has achieved less than a quarter of the 80.7 billion-reais goal
it set for 2014.
Treasury chief Arno Augustin told reporters in Brasilia that
the surprise deficit was caused by a fall in tax revenue, but
that the government believes it can reach its annual goal.
The government will get some extra cash from a decision to
sell billions of dollars worth of offshore oil rights to
state-run oil company Petroleo Brasileiro SA. Rating
agencies warned on Friday that the price could strain company
finances and hurt its credit-worthiness.
Augustin said Petrobras is expected to pay an initial 2
billion reais from that amount by the end of the year and that
state development bank BNDES is set to contribute with 1 billion
reais in dividends in June.
The government has resorted to extraordinary revenues such
as dividend payments, overdue tax settlements and concession
premiums to make up for almost stagnant tax revenues. Many
economists say the use of one-off cash resources is not
sustainable and hides deeper problems related to the
government's expansionary fiscal policies.
The central bank is scheduled on Monday to release the
country's consolidated fiscal results, which includes states and
municipalities and is regarded as the benchmark for Brazil's
Brazil's public finances have deteriorated under Rousseff as
spending has grown while revenues have remained flat, leading
Standard & Poor's to downgrade the country's sovereign debt
rating closer to junk status earlier this year.
($1 = 2.20 Brazilian reais)
(Reporting by Luciana Otoni; Writing by Alonso Soto; Editing by
Chizu Nomiyama, Meredith Mazzilli and David Gregorio)