Government presents PLOA 2022 with R$ 89.1 billion in court orders and Brazil Aid the size of Bolsa Família in 2021

Economy Minister Paulo Guedes speaks at a meeting, alongside President Jair Bolsonaro (Photo: Marcos Corrêa/PR)

SAO PAULO – The federal government forwarded to the National Congress, this Tuesday (31), the Annual Budget Bill (PLOA) of 2022. This was the deadline for submitting the text to the parliament, which will be able to modify it during its processing.

As so far, no way has been found to divide up the precatório (judicial debts for final decisions), the text includes the totality of the R$ 89.1 billion of expenses foreseen by the Judiciary. But it can be changed before your sanction.

On the other hand, Auxílio Brasil – a new income transfer program that the government intends to create to replace Bolsa Família – was estimated at R$ 34.7 billion, with the goal of serving 14.7 million families.

According to the economic team, this is the same level of resources foreseen for the old program in 2021.

The presentation shared by the Ministry of Economy says that the basic nucleus of Auxílio Brasil will be composed of three benefits that aim to promote child and youth development through income transfer with conditionalities:

  • Early Childhood Benefit: paid to families with children between 0 and 36 months of age;
  • Family Composition Benefit: aimed at families that have pregnant women and people aged 3 to 21 who are incomplete in their composition;

  • Benefit for Overcoming Extreme Poverty: granted to families who have not overcome the extreme poverty range after payment of the two previous benefits.

The Budget Proposal for 2022 presents a primary deficit for the central government of BRL 49.6 billion, below the deficit target of BRL 170.5 billion, established in next year’s Budget Guidelines Law, sanctioned by President Jair Bolsonaro ( without party) last week.

The indication is the result of R$ 2.01 trillion in primary expenses and R$ 1.96 trillion in primary revenues. The text sent to the parliament also presents expenses of R$ 4.62 trillion, referring to the Three Powers.

The spending ceiling – fiscal rule that limits the aggregate growth of most public expenditures to the previous year’s inflation – was estimated at R$ 1.610 trillion, respecting the 8.35% IPCA accumulated in 12 months until June, indicated by IBGE.

The text also estimates an insufficiency to comply with the R$ 105.4 billion golden rule.

In practice, this will require issuing requests for the opening of extraordinary credit by the federal government so as not to incur non-compliance with the tax rule.

economic parameters

The PLOA 2022 considers a growth of 5.3% in the Gross Domestic Product (GDP) in 2021, and 2.5% in 2022, 2023 and 2024. Regarding inflation, for 2021 it was considered a high of 5.90% for the Extended National Consumer Price Index (IPCA) – much lower than the market estimated at 7.27%, as shown in the Focus report, released by the Central Bank.

In relation to exchange rates, the annual average is estimated at R$ 5.20 in 2021 and R$ 5.15 in 2022. The minimum wage, in turn, was estimated at R$ 1,169.00 – an increase of 6. 2%, or R$69 compared to the current floor of R$1,100.

The budget piece also considered the approval of the bill that deals with the reform of the Income Tax (PL 2337/2021), although the economic team has once again reinforced the “neutrality of the global effects of the measures”.

Here is the distribution of budget expenses by agency: