"We reached the primary surplus target with almost $1 billion to spare," said Altamir Lopes, director of the Central Bank's economic department. "I have no doubt we will meet next year's target as well." In monetary terms, Brazil's 1999 primary surplus reached 31.1 million real is against an IMF target of 30.19 million.

The central bank did not give an average dollar/real figure for 1999. On Monday, the Brazilian currency was trading at about 1.78 reals to the dollar.Brazil was required to meet the primary surplus target, which excludes debt servicing, as part of a fiscal austerity drive agreed to with the IMF in exchange for a $41.5 billion loan package, revamped after the country's shock 35-per cent-plus January 1999 devaluation of its long-steady currency.

Last Friday, the central bank said that Brazil also met all monetary and foreign debt goals for 1999, as outlined by the IMF.

Despite the year-end success, Brazil startled many market analysts by posting a whopping December primary deficit of 1.79 billion reais. That follows a surplus of 857 million reais in November and a 582 million real deficit in December last year. Lopes explained that a big chunk of the increase was due in part to full payment of year-end salary adjustments and bonuses for public workers. But the biggest factor was hefty state and municipal spending, which alone added 1.47 billion reais to the December deficit figure.

In comparison, the central government trimmed public sector spending, curbing its normal seasonal deficit to just 316 million reais.