Tebet details LDO and defends “fiscal space” of R$ 172 billion

The Minister of Planning and Budget, Simone Tebet, presented, this Monday (17), the forecasts and details of the 2024 Budget Guidelines Law (LDO), which was delivered to the National Congress, last Friday. (14).

The Budget Guidelines Law is used to prepare the Federal Budget for the following year, establishing the parameters that must be taken into account, such as expected inflation, minimum wage, interest rate, among others.

According to the government’s proposal, the estimate of primary expenditure for 2024 is BRL 2.042 trillion. The estimated value was well above the limit for growth in expenses readjusted by the inflation of the previous year, based on the spending ceiling rule in force, which is R$ 1.87 trillion.

The primary expenditure is the Union’s expenditure on public services (health, education, security, etc.) and on the payment of civil servants. The calculation does not include expenses with the payment of loans and financing.

The government is counting on the approval of the new fiscal framework, replacing the spending ceiling, to be able to release an extra R$ 172 billion already foreseen in the ceiling-breaking PEC. The new tax rule will be delivered to Congress this Tuesday (18). The text foresees as a basis a spending growth limit equivalent to 70% of the projected increase in revenue. The remaining 30% can be used to reduce the public debt or for cash composition.

“From the perspective of Planning, the new framework deals with the control of public expenses, it is with fiscal responsibility that we will have social. Therefore, limit and expenses grow less. In order to be able to spend what we need on the social side, there must be an increase in revenue”, detailed Tebet.

According to Tebet, if the new fiscal framework is not approved by the National Congress, Brazil may not be able to invest in social programs. “All social programs would be compromised,” he said. She cited commitment in Minha Casa, Minha Vida; maintenance of the federal road network; development of Basic Education; Capes scholarships; Popular Pharmacy; and Primary Care.

Regarding the increase in the minimum wage, Tebet informed that the promise made by President Luiz Inácio Lula da Silva (PT) will be fulfilled. “There is not the slightest chance that the president will not give a real increase in the minimum wage,” declared Tebet.

The text proposes a minimum wage of R$ 1,389 for 2024, with no real gain. The readjustment proposal for next year only considers the correction of the value forecast for December 2023 by the National Consumer Price Index (INPC), of 5.16%. For 2025 and 2026, the projected amounts are R$1,435 and R$1,481, respectively.

Regarding the main macroeconomic parameters, the government projected for the next year economic growth (GDP) of 2.34%, inflation (IPCA) of 3.52%, average Selic rate of 11.08% and average dollar exchange rate in BRL 5.25.

The government project has more than 177 articles, almost a thousand pages and six annexes. The proposal is now being analyzed by the Joint Commission on Plans, Public Budgets and Inspection (CMO), which has Senator Daniella Ribeiro (PSD-PB) as president. The rapporteur for the LDO project will be chosen by the CMO.