Government projects first surplus in 9 years and announces new block of BRL 2.634 billion

The Economy Ministry on Thursday substantially improved its forecast for the central government’s 2022 fiscal result in its last official review of the figures ahead of the elections.

In this way, it started to forecast a primary surplus for the first time, marking the return of the accounts to the blue after consecutive leaks since 2014.

However, it announced an additional block of BRL 2.6 billion in funds from ministries to respect the spending ceiling.

Income and expense report

According to the evaluation report on primary income and expenditure for the 4th quarter, released today, the official estimate now points to a surplus of BRL 13.548 billion for the year, compared to a deficit projection of BRL 59.354 billion made in July.

This document assesses compliance with the fiscal target and the cap rule. The previous report predicted a primary deficit corresponding to 0.6% of the Gross Domestic Product (GDP). Now, the forecast is for a surplus of 0.1% of GDP.

Cut

After maneuvering to release up to BRL 5.6 billion in amendments to the so-called “secret budget” on the eve of September 7, the new block was BRL 2.634 billion in discretionary expenses to meet the spending ceiling in 2022.

The new contingency is due to the increase in mandatory spending, especially in social security benefits. The drop in expenses with subsidies, subsidies, Proagro, Executive Branch spending and some reductions in payments of precatories due to judicial decisions were not enough to compensate for the greater expenditure on Social Security.

According to the Special Secretary of the Treasury and Budget of the Ministry of Economy, Esteves Colnago, the “current photograph” shows a need to block this year’s Budget of R$ 10.499 billion, from R$ 7.9 billion projected before.

projections

The economic team’s projection for the Union’s total primary revenues this year went from R$ 2.226 trillion to R$ 2.308 trillion.

The estimate for net revenue – free of transfers to regional governments – went from BRL 1.774 trillion to BRL 1.844 trillion this year.

On the primary expenditure side, the total expenditure forecast in 2022 went from R$1.833 trillion to R$1.830 trillion.

With the revisions to this report, the volume of mandatory spending went from BRL 1.679 trillion to BRL 1.677 trillion, while discretionary spending went from BRL 154.246 billion to BRL 153.236 billion this year.

amendments

On the release of RP9, amendments by the rapporteur, on September 7, Colnago said there was a recomposition that ended up leading to a net unblocking balance of R$ 600 million. For him, it is important to have flexibility to meet the day to day of ministries and also for some discretionary policies. “what matters is the need in terms of public policies”, he commented.

BNDES

Regarding the recent decision by the Federal Court of Auditors (TCU), which determined that the National Bank for Economic and Social Development (BDES) provide the National Treasury with a faster return of transfers considered irregular, Colnago said that the technical areas are talking about ways and deadlines for implementing the decision.

So far, the BNDES has returned around R$10 billion to the Treasury and the TCU understands that another R$69 billion has been transferred irregularly and needs to be returned to the public coffers. Economy Minister Paulo Guedes has said that the development bank will have to return more than BRL 90 billion to the Treasury, but the ministry’s technicians explained that about BRL 23 billion transferred is not part of the Court’s decision.

(With Estadão Content and Reuters)

About Abhishek Pratap

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