Brazil's budget deficit narrowed to 9.35% of gross domestic product in July from 9.50% in June, the country's central bank said Wednesday.
The so-called primary budget balance, which excludes interest payments and indicates the country's capacity to pay down debt, was a deficit of 170.5 billion Brazilian reais ($53.8 billion), equal to 2.66% of GDP in July, up from a revised 2.61% in June, the bank said.
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The government is asking Congress to lower this year's primary-budget target to a deficit of 159 billion Brazilian reais from a deficit of 139 billion reais after a sharp drop in tax receipts.
Following an 11-year stretch of back-to-back primary surpluses, Brazil turned to red ink in 2014 and is expected to record shortfalls for the next few years, meaning the debt load is bound to keep growing.
Brazil's gross debt rose to 73.8% of GDP in July, from a revised 73.2% of GDP in June.
Hopes of reverting to surpluses rest mainly on a pension overhaul that has been stuck in Congress amid a toxic political climate.
Write to Paulo Trevisani at firstname.lastname@example.org
(END) Dow Jones Newswires
August 30, 2017 10:04 ET (14:04 GMT)