Brazil economy posts first budget gap in 12 years

Brazil on Friday posted its first budget deficit in 12 years -- more bad news for an economy already battling high inflation and facing deep spending cuts.

The central Bank released data showing a public sector primary deficit equal to 0.63 percent of gross domestic product in 2014.

It marks the first time that the figure has been in the red since 2002, when its central bank began keeping statistics, and shows a sharp fall-off even from the previous year, when GDP growth was 1.88 percent.

The central bank said the budget deficit totaled 32.5 billion reals ($12.5 billion USD) for public sector spending, which is comprised of regional and federal government expenditures.

In 2010, the economy had blistering growth of 7.5 percent, fueled by high prices for commodities and natural resources. Since then however, growth has slowed dramatically.

Meanwhile, inflation in 2014 reached 6.41 percent, just below the government's maximum target of 6.5 percent.

Brazil's leftist president Dilma Rousseff, who was re-elected in October, has responded by paring back the budget while promising to protect social programs for the working class.

She recently announced budget cuts expected to total $8.4 billion this year, limiting discretionary spending on travel, services and other spending.