Brasília, 4/22/2004 (Agência Brasil) - The government's primary surplus in the first quarter of this year rose to 4.63% of GDP, or US$6.006 billion (R$17.597 billion). For the sake of comparison, during the same period last year the primary surplus was 4.34% of GDP, or US$5.165 billion (R$15.132 billion).

Pursuant to the Brazil - IMF agreement, the country is supposed to have a primary surplus of 4.25% of GDP this year. Most of that surplus is to come from the federal government (National Treasury, Central Bank and the Social Security Security system), with the rest from state-run enterprises, and state and local governments.

By achieving a high primary surplus (an account that does not consider interest payments) the Brazilian government is basically signalling that it is capable of reducing its debt and honoring contracts.

Translator: Allen Bennett