($1 = 5.2054 reais) (Reporting by Marcela Ayres; Editing by Mark Porter and Aurora Ellis)
(Adds details, context)
BRASILIA, Feb 27 (Reuters) - Brazil's central government
posted a better-than-expected primary budget surplus in January
on the back of record tax revenues, Treasury data showed on
Monday, although the outlook for the year is for a large
deficit.
The central government, comprised of the Treasury, central
bank and social security, reported a primary budget surplus of
78.3 billion reais ($15 billion) in January, above the median
forecast of a 60.9 billion reais surplus in a Reuters poll.
This was the best nominal result for the month since 1997,
boosted by higher revenues amid a surge in taxes on capital
income, as the country's benchmark Selic interest rate was
aggressively hiked to control inflationary pressures, resulting
in larger collection over fixed-income funds and bonds.
After pushing its benchmark rate from a record-low of 2% in
March 2021, the central bank paused its tightening cycle in
September, holding it at 13.75%.
Although the central government's primary surplus reached
54.5 billion reais in 12 months, the primary deficit in this
year's budget, the first under President Luiz Inacio Lula da
Silva, had been forecast at 231.6 billion reais after Congress
approval for a multi-billion spending package to increase
expenses and meet campaign promises.
Finance Minister Fernando Haddad released a fiscal package
in January to more than halve the shortfall, but the measures
are uncertain, including a possible tax increase on fuels that
needs Lula's approval.
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