(Adds data on overall budget deficit, background)
By Silvio Cascione and Luciana Otoni
BRASILIA, March 28 Brazil avoided a primary
budget deficit in February, contrary to most market
expectations, a small step forward in its efforts to shore up
public finances and regain credibility with investors.
Brazil posted a primary surplus of 2.13 billion reais ($938
million) in February, the central bank said on
Friday, defying forecasts for a 500 million reais deficit in a
Reuters poll with 16 analysts.
The primary budget balance represents the public sector's
excess revenue over expenditures before debt payments.
February's unexpected surplus was entirely due to excess
savings in states and municipalities. Brazil's central
government, which includes the federal administration, social
security and the central bank, had a 3.4 billion reais deficit
last month, Brazil's Treasury said on Thursday.
Brazil's public finances have deteriorated rapidly under
President Dilma Rousseff, leading Standard & Poor's to downgrade
the country's sovereign debt rating closer to junk status on
Brazil's government pledged to save 99 billion reais this
year in primary surplus, or 1.9 percent of the country's GDP.
But economists in a Reuters poll last month said that target was
probably out of reach.
In the 12 months through February, Brazil's primary surplus
was equivalent to 1.76 percent of GDP, up from 1.66 percent in
January but still below the government's target.
The government has fallen short of its consolidated primary
surplus target in the past two years.
Brazil's overall budget deficit, which includes
interest payments, narrowed to 9.516 billion reais in February
from 10.478 billion in January.
The public sector's net debt was equivalent to 33.7 percent
of GDP in February, up from 33.1 percent of GDP in January.
($1 = 2.27 Brazilian reais)
(Reporting by Silvio Cascione and Luciana Otoni; Editing by