Brazil beat a key budget surplus goal under an IMF loan with billions of dollars to spare as government coffers swelled due to strong results at state firms in August, central bank data showed on Friday.

The bank said Latin America's largest economy posted a primary budget surplus of 10.9 billion reais ($3.8 billion) in August. That propelled Brazil's cumulative surplus in the first eight months of the year to 63.73 billion reais, above the 56.9 billion reais IMF surplus goal for the first nine months of 2004.

The fiscal goal is part of a $40 billion loan deal with the International Monetary Fund.The primary budget surplus, which excludes interest payments, is an accounting measure widely seen as a gauge of a country's ability to service its debt.

The bank said an unexpectedly strong showing by state firms meant Brazil's public sector primary surplus, which excludes debt interest payments, more than doubled in August from a surplus of 4.96 billion reais in the same month of 2003.

"This was much higher than expected, the difference came from state firms," said Mauricio Oreng, an economist at Unibanco. "Either way, the idea that we have a very favorable outlook on the fiscal front is very much intact."

The central bank said state companies contributed with 5.5 billion reais to the primary surplus result in the month. The federal government contributed 3.8 billion reais and local governments 1.6 billion reais.

"State-oil firm Petrobras was the single, biggest contributor to the result," a central bank statement said. Petrobras, Brazil's biggest company, has benefited from the surge in world oil prices.

BOOMING TAX REVENUES

After tough budget cuts introduced last year, Brazil's fiscal performance has been turbo-charged by high tax revenues this year thanks to one of the highest growth rates in several years.

In the first eight months of this year accumulated tax revenues reached 212.65 billion reais, up from 191.90 billion reais in same period of 2003.

(From Reuters, September 24, 2004)

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