Government details blocking of R$2.9 billion in the Budget; Cities and Transport are the hardest hit

Government details blocking of R$2.9 billion in the Budget;  Cities and Transport are the hardest hit


The government had already announced the total amount last week to meet the limits of the fiscal framework; details came out this Thursday. The government estimates a deficit of R$9.3 billion in 2024. The ministries of Cities and Transport were the hardest hit by the blockage of R$2.9 billion in this year’s budget. The global value was announced last week, but the details only came out this Thursday (28), through a presidential decree published in the “Official Gazette of the Union”. Some areas considered priorities, such as health and education, were not limited in resources. However, the Ministry of Social Development had a blockage of R$281 million. See below the amounts blocked by the government: Ministry of Cities: -R$ 741.74 million Ministry of Transport: -R$ 678.97 million Ministry of Defense: -R$ 446.48 million Ministry of Development and Social Assistance: -R $281.66 million Ministry of Integration: -R$179.79 million Ministry of Science, Technology and Innovation: -R$118.79 million Ministry of Agriculture: -R$105.49 million Ministry of Finance: -R$94 .39 million Ministry of Foreign Affairs: -R$ 69.29 million Ministry of Justice and Public Security: -R$ 65.59 million Ministry of Ports and Airports: -R$ 52.29 million Ministry of Planning and Budget: -R $37.09 million Ministry of Management and Innovation: -R$36.29 million The blockage is due to the spending limit of the fiscal framework, the new rule for public accounts approved last year. According to the rule: the government also cannot increase expenses above 70% of the projected growth in revenue. spending growth cannot exceed 2.5% per year in real terms, that is, above the previous year’s inflation. The objective of the fiscal framework is to avoid, in the future, a spike in public debt and a worsening in the interest charged to investors when issuing public bonds. The limitation will be made on the ministries’ free spending, including amendments, that is, those that are not mandatory. These expenses involve investments and funding of the public sector. Costing expenses include: support services, information technology, electricity and water, rental of movable assets, daily allowances and tickets and communications services. Federal Government announces blockage of almost R$3 billion in this year’s budget Deficit of R$9.3 billion in 2024 Even with the budget blockage, the economic team reported last week that it will not be possible to eliminate the deficit in the government’s accounts this year — target contained in the Budget Guidelines Law (LDO) sanctioned by President Luiz Inácio Lula da Silva. According to the revenue and expenditure assessment report, however, the government’s accounts are expected to record a deficit of R$9.3 billion this year. According to the rules of the fiscal framework, there is a band of 0.25 percentage points of GDP above and below the fiscal target. With this, the government can record a deficit of up to R$28.8 billion in 2024 without the objective being missed. In 2023, the federal government recorded a primary deficit (not counting interest expenses) of R$230.5 billion. It was the second worst result in the historical series. In pursuit of the fiscal target, last year the government approved a series of measures to increase federal revenue. The objective is to increase revenue by R$168.5 billion in 2024.


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