RPT-UPDATE 2-Brazil bets on extra revenues to improve finances
BRASILIA, Nov 28 (Reuters) - Brazil's primary surplus will soar in the last two months of this year thanks to extraordinary revenues, Treasury chief Arno Augustin said on Thursday, evidence of the government's reliance on one-time cash inflows to try to meet an important fiscal goal in 2013.
President Dilma Rousseff is betting on extra cash stemming from last-minute corporate tax settlements and an oilfield auction bonus to beef up the government's finances, which are under close scrutiny from investors.
Augustin said the government has already received 15 billion reais($6.45 billion) from the Libra oilfield auction and expects more money to flow in from corporate tax settlements. Brazilian miner Vale SA agreed on Wednesday to pay the government 22.325 billion reais in back taxes, of which 5.965 billion reais will be paid in November.
The rapid erosion of Brazil's finances this year has triggered alarm in the market, raising fears of a sovereign rating downgrade next year that could scare off investors and undermine a timid recovery in Latin America's largest economy.
A series of tax breaks and high public spending will make it very difficult for Brazil to meet its already-reduced overall primary budget surplus target of 2.3 percent of the gross domestic product.
The central government posted a primary budget surplus of 5.437 billion reais in October, official data showed on Thursday, bouncing from a deficit of 10.437 billion reais recorded in September -- the worst in 17 years.
So far this year the central government's primary surplus, which includes the central bank and social security, amounts to 33.43 billion reais, or less than half the annual goal of 73 billion reais. The government needs to save up about 40 billion reais in the next two months to meet its 2013 target.
The primary surplus, which represents excess revenue over expenditures before debt payments, is a closely watched gauge of the country's ability to repay its debt.
The central government makes up for most of the country's overall public sector primary surplus.
The central bank is scheduled to release the overall primary surplus, which also includes the results of state enterprises, states and municipalities, on Friday at 10:30 a.m. (1330 GMT).