In January, Brazil's government reported a primary surplus of R$ 86.9 billion, as disclosed by the National Treasury on Wednesday, February 25. A primary surplus occurs when government revenue from taxes and other sources exceeds its expenditures. This surplus is significant despite being a slight decrease compared to the same month last year, when the surplus was R$ 88.84 billion, adjusted for inflation. Notably, these figures do not include interest payments on public debt.

The surplus was largely driven by an unprecedented increase in federal revenue, the highest recorded in any month since the Federal Revenue's historical data began in 1995. This increase can be attributed to economic growth and rising tax rates, which have bolstered government income. In January, net revenue—after transferring funds to states and municipalities—rose by 1.2% in real terms, amounting to R$ 272.78 billion.

The report indicates that the fiscal situation, although slightly worsened when compared year-on-year, still reflects a resilient economic environment. The impressive revenue growth highlights the effectiveness of government policies and economic conditions contributing to the heightened tax collection. Moving forward, the sustainability of this surplus will depend on maintaining economic growth and managing expenditures efficiently.