Brazil's central government posts $2.1 billion primary surplus in July

In the year through July, the central government posted a primary deficit of 81.3 billion reais, up 12.4% in real terms from the same period a year earlier.

Over a rolling 12-month period, the deficit reached 0.55% of gross domestic product.

The government's fiscal target for this year is a primary surplus of 0.25% of GDP, with a tolerance band of 0.25 percentage point in either direction.

However, under Brazil's fiscal framework, the government is allowed to exclude certain expenditures when assessing compliance with the target, most notably part of its large stock of court-ordered payments.

President Luiz Inacio Lula da Silva's government concentrated court-ordered payments earlier this year, with most of those disbursements occurring in March, compared with July last year.

These payments, which stem from final court rulings against the federal government, have weighed on Brazil's public finances for years.

Largely due to the shift in the payment schedule, July expenditures fell 20.7% in real terms from a year earlier, a decline of 56.4 billion reais.

At the same time, net revenue rose 7.7%, or 16.1 billion reais, supported by strong tax collection and higher oil royalty receipts amid a rise in crude prices driven by tensions in the Middle East.

BRASILIA, Aug 27 (Reuters) - Brazil's central government posted a primary surplus of 10.8 billion reais ($2.1 billion) in July, Treasury data showed on Thursday, helped by a calendar effect that led to a sharp decline in expenditures during the month.