Brazil central gov't Oct budget surplus up sharply

BRASILIA, Nov 28 (Reuters) - Brazil's central government primary budget surplus rose sharply to 10.01 billion reais ($5.58 billion) in October, from 38.7 million reais in September, the National Treasury said on Wednesday.

The surplus also widened from 6.85 billion reais in October 2006.

The strong increase is due to a recovery from one-off expenses in September, including the early payment of part of year-end bonuses to public servants, the Treasury said. The second installment of the bonus will be paid in December.

The central government's primary budget surplus in the year through October was equivalent to 2.96 percent of gross domestic product, compared with 2.89 percent of GDP during the same period a year ago.

The primary surplus includes spending by the Treasury, central bank and social security system but excludes interest payments on debt and transfers to state and local governments.

The central government surplus feeds into the consolidated public-sector primary surplus, which is closely tracked by investors as a measure of Brazil's ability to pay its debts. The consolidated primary surplus, due out on Thursday, also excludes interest payments. ($1=1.794 Brazilian reais) (Reporting by Isabel Versiani; Translating by Raymond Colitt; Editing by James Dalgleish)