Brazil public sector debt rises to record 89.7% of GDP in January

By Jamie McGeever

BRASILIA, Feb 26 (Reuters) - Brazil's national debt started this year at a record high, central bank figures showed on Friday, while rock-bottom official borrowing costs kept interest payments as a share of the economy anchored at historic lows.

Government debt rose to 89.7% of gross domestic product in January, up half a percentage point from the previous month and the highest level on record.

Net debt as a share of GDP, however, fell to 61.6% from 63.0% the month before, the biggest fall since March last year, thanks to exchange rate depreciation and the monthly primary surplus.

Analysts had expected it to remain steady at 63.0%.

The public sector registered a surplus in January excluding interest payments of 58.4 billion reais ($10.6 billion), the central bank said, more than the 50 billion reais median estimate in a Reuters poll of economists and the highest since the series began in 2001.

The primary deficit in the 12 months through January was 700.9 billion reais, or 9.4% of GDP, while the nominal deficit including interest payments was 1.02 trillion reais, or 13.7% of GDP, the central bank said.

While debt and borrowing rose, record low interest rates meant that the public sector's interest payments were anchored at 4.25% of GDP, down from 5.16% of GDP a year earlier.

The series low of 4.22% of GDP was registered in December.

In nominal terms, interest payments in the year to January fell to 315.7 billion reais from 383.6 billion, the central bank said.

($1 = 5.53 reais) (Reporting by Jamie McGeever; Editing by Alex Richardson and Catherine Evans)

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