Brazil sees first-ever primary deficit

Brazil registered a primary deficit in 2014, the first since records have been kept, the Central Bank said Friday.

Last year's deficit valued at 32.536 billion reals (12.324 billion U.S dollars) accounted for 0.63 percent of gross domestic product (GDP).

According to a Central Bank report, the figure took into account fiscal deficits at all government levels, from federal to state and local, as well as in state-owned firms, with the exception of banks, oil giant Petrobras and energy company Eletrobras.

In December alone, the deficit amounted to 12.894 billion reals (around 4.884 billion dollars), up 24 percent year-on-year.

At the beginning of 2014, the government had set a primary surplus target of 1.9 percent of GDP. But in September, due to a rise in public spending in an electoral year, the government succeeded in getting the Congress to approve a law that authorized reversing that target.

Adding interest payments on the public debt to the primary deficit pushed the nominal deficit to 343 billion reals (129.434 billion dollars) in 2014, or 6.7 percent of GDP.

Brazil's new Finance Minister Joaquim Levy pledged on Friday to rein in spending and balance the budget, with an eye to achieving a primary surplus of 1.2 percent of GDP in 2015.

Levy said the government plans to spur investment and economic activity by pushing infrastructure development.

Addressing a business seminar in Sao Paulo, Brazil's largest city, Levy stressed that port building is one area that could draw foreign investment.

"We need to re-optimize the state-owned ports," he said, "the cargo transport industry has changed dramatically over the past 20 years, as have the demands of our partners. So their physical condition is something that we have to resolve as quickly as possible."

Officials are also looking to expand trade accords with other countries to boost exports and trade exchange, he said, adding that Brazil has "to think about reentering deeper into the international market."

As the government has no intention to artificially prop up the real, the private sector should not count on it to make the currency more competitive, said Levy. Endi