Bolsonaro closes government accounts with a surplus of BRL 54 billion

Former President Jair Bolsonaro (PL) left the government accounts with a surplus of R$54.1 billion in 2022, after eight years of deficit. The result exceeded by 58% the projection estimated by the extinct Ministry of Economy, in December of last year, when the expectation was that the primary surplus would close the year with a reach of R$ 34.1 billion.

The primary surplus represents the difference between government revenues and expenditures without considering the payment of interest on the public debt.

According to information supplied by Agência Brasil, the result was driven by record revenues, which rose with the growth of the economy and revenues from oil royalties, which increased in value with the war between Russia and Ukraine.

The postponement of expenses also contributed to Bolsonaro leaving the government with a surplus in the accounts, such as the installment of large-value writs that were in force last year and the low budget execution of several government programs.

Best result since 2013

In nominal values, this is the best result for public accounts since 2013, when the central government registered a primary surplus of R$72.159 billion. From 2014 to 2021, public accounts recorded consecutive annual deficits.

Achieving a surplus was one of Jair Bolsonaro’s government proposals when he assumed the presidency in 2020. Also in 2018, former minister Paulo Guedes announced that he would zero the deficit in the first year of his term. However, with the Covid-19 pandemic and the increase in expenses to contain its effects, in addition to the drop in revenue, that year ended with a deficit of R$ 743 billion.

The resumption began in 2021, when the government ended the year with a deficit of R$ 35 billion. The result was surprising, since the initial forecasts were for a deficit of R$ 331 billion for that year.

The best index was explained by the volume of collection recorded throughout the year and the commitment to focus on expenses to face Covid-19, in addition to the effort to contain expenses in recent years, with the advent of the spending ceiling, according to the Treasury. .

Still in 2018, shortly after Bolsonaro’s election, the Independent Fiscal Institution (IFI) of the Senate predicted that zeroing the deficit was a feasible goal only for 2023, and that would include the need for a broad reduction in expenses.

Reduction in expenses

In 2020, reducing expenses was not possible due to the pandemic, when the government allocated BRL 539.4 billion to contain the damage. However, mandatory expenses accumulated over that year remained stable, explained the then Ministry of Economy at the time.

In 2021, expenses continued to be reduced in several segments, such as extraordinary credits, financial support to states and municipalities and subsidies and subsidies – all associated with the Covid-19 pandemic, adding up to a reduction in expenses of R$ 472 billion. That year there was also a reduction in salary bonuses and unemployment insurance and a drop in personnel and social security expenses, in a sum of another R$ 38.8 billion.

In 2022, following the trend of the previous year, central government expenses fell by BRL 82.2 billion, also referring to extraordinary credits to combat the pandemic. Spending on federal civil servants also fell, especially associated with the freezing of wages and the absence of readjustments for civil servants.

However, expenses with social programs, such as Auxílio Brasil and Taxi Driver and Truck Driver aid, increased government spending by R$ 61.7 billion above inflation.

Revenues

Still in 2021, leverage in revenues explained the reduction in the government accounts deficit, a trend extended to 2022.

According to Agência Brasil, net revenue grew by 17.5% compared to 2021 and, discounting inflation by the Extended National Consumer Price Index (IPCA), the increase was 7.7%.

Tax collection rose R$ 102.4 billion above inflation in the 2022 Income Tax, especially due to the increase in corporate profits, especially energy and oil, helping to offset the exemptions for industry and fuel.