Brazil's primary surplus unlikely in 2015

A quick calculation suggests that while both the rise in the interest payments and the deterioration in the primary balance have contributed equally to the rise in the fiscal deficit, the bulk of the recent rise (i.e., on average 62% of the total rise since September 2014) has been caused by rising interest payments, as the implicit interest rate on public debt has risen sharply. 

With the BRL and inflation keeping pressure on yields, there is considerable possibility of further rise in interest rates even if the government is able to achieve a primary surplus this year. 

"we expect no primary surplus in 2015, followed by a surplus of 0.2% of GDP in 2016, based on our new estimates. The fiscal deficit should moderate to 5.5% of GDP this year and 4.6% in 2016" Said Societe Generale in a report on Thursday