UPDATE 2-Brazil first over-abundance some-more than doubles in January

Thu Feb 25, 2010 1:11pm EST Related News Telefonica plans $1.27 bln 2010 Brazil investmentsMon, Feb 22 2010Itau Unibanco posts 2.81 billion reais Q4 profitTue, Feb 9 2010Brazil central gov"t primary budget short of targetWed, Jan 27 2010

* Primary surplus up to 16.2 bln reais from 7.4 bln reais

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* Nominal budget balance turns to surplus in January

(Adds Finance Minister comments and context)

BRASILIA, Feb 25 (Reuters) - Brazil"s consolidated primarybudget surplus more than doubled in January compared to a yearago, the central bank said on Thursday, as a rebound in LatinAmerica"s largest economy boosted government revenues.

The surplus BRPSPS=ECI widened to 16.2 billion reais($8.8 billion) in January from 7.4 billion reais in the samemonth last year. In December, Brazil posted a primary budgetsurplus of just 275 million reais.

The result was also far better than the 13.65 billion reaissurplus expected by a median estimate of 14 economists surveyedby Reuters. Estimates for the surplus ranged from 7 billionreais to a 15.5 billion reais.

"It"s an excellent result that shows we will meet the 3.3percent primary surplus (target) this year," Finance MinisterGuido Mantega told a press conference in Brasilia.

The numbers were helped by a rebound in growth and theexpiry of some tax breaks to key industries -- both of whichallowed Brazil to post record tax revenues for the month ofJanuary.

Last year the country struggled with deteriorating fiscalaccounts, with the primary budget surplus reaching 2.06 percentof gross domestic product in the 12 months through December --its lowest level since the data series began in 2001.

But Brazil"s primary budget surplus firmed to 2.32 percentof GDP in the 12 months through January, data showed onThursday.

The rebound in Brazil"s fiscal accounts also helped itsnominal budget balance turn to surplus. The country"s overallbudget, which includes interest payments, ran a surplus of 2.2billion reais BRBUD=ECI last month, compared to a deficit of7.5 billion reais in January 2009.

Investors look at the primary budget surplus, whichexcludes interest payments, as a gauge of a country"s abilityto service its debt.

The country"s net public sector debt also fell to 41.7percent of GDP in January from 42.9 percent the month prior.

($1=1.835)

(Reporting by Isabel Versiani, Writing by Ana Nicolaci da Costa; Editing byDiane Craft)

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