Members of the group that led the economy in the Bolsonaro government question the Finance Minister’s interpretation
The economic team of former Economy Minister Paulo Guedes disputes the data presented by the Finance Minister, Fernando Haddad, in Congress. In a public hearing in the Chamber held on Wednesday (May 22, 2024), he said that the government’s 2022 primary surplus Jair Bolsonaro (PL) was “fake” and that there were defaults in the payment of court orders and to governors.
The data was circulated among former members of the previous government’s economic team. Haddad said that the 2023 Budget was sent by the Bolsonaro government with the estimate of a primary deficit of R$63 billion, but did not include some expenses that were planned.
Read the expenses that were left out, according to Haddad:
- Bolsa Família – R$60 billion;
- Precatório – R$90 billion;
- social Security – R$15 billion;
- ICMS compensation to governors – R$26.9 billion.
Added to the deficit of R$ 63 billion already foreseen in the Budget, the negative balance would, therefore, be close to R$255 billion. “We inherited a fiscal problem of between R$250 billion and R$300 billion. I’m presenting a number. I am presenting the public accounts as they are. We received a fiscal problem, in 2023, of this order”he declared.
Paulo Guedes’ team said that, maintaining the same “fiscal governance from 2019 to 2022”the primary result of the central government would be “much better” than foreseen in the PLOA (Annual Budget Bill) of 2023.
He mentioned that in 2022, when the budget forecast was for a deficit of R$59.4 billion, the Bolsonaro government ended with a positive balance of R$54.9 billion.
The team says that of the R$90 billion in precatório – which in reality is R$ 92 billion – only 1/3 of the value refers to 2022. “The remainder refers to the years 2023 and 2024 (i.e., they are liabilities of the current government)“, he said.
According to Guedes’ team, the R$60 billion the most with Bolsa Família refers to the campaign promise of the 2 candidates in the presidential election and “no to public policy” implemented by economic management, according to members of the previous government.
In September 2022, during the electoral dispute, Guedes said that Auxílio Brasil (formerly Bolsa Família) of R$600 was guaranteed for the following year. He had said in August 2022 that the super rich would pay for the benefit.
Haddad said that the government needed to review social security spending, because R$15 billion were underestimated. The previous economic team said that the budget piece had its estimates calculated according to the parameters available in August 2022. It argued that the review of expenses with the INSS (National Social Security Institute) has been higher in the recent period.
“For example, PLOA 2024 (sent in Aug/2023) received reviews from the Chamber and Senate Budget Consultancy, pointing out that the underestimation of social security expenses was of the order of at least R$ 31.8 billion)“, he said.
PUBLIC ACCOUNTS
Primary spending fell during the Bolsonaro government. Primary expenditure fell from 19.3% to 19.0% of GDP (Gross Domestic Product). “It was the first time since redemocratization that a president left to his successor a lower expense than that inherited from the previous government”said the economic team.
He also declared that the nominal result of the consolidated public sector – which includes the Union, States, municipalities and state-owned companies – went from an accumulated deficit in 12 months of R$460.4 billion in December 2022 to R$967.4 billion by December 2023. The worsening was R$507 billion in the period. In the last available result, the nominal deficit was R$998.6 billion in the 12 months up to March.
The nominal result of the consolidated public sector considers the payment of interest on public debt. The primary result excludes interest expense.
The primary result, which does not include the payment of interest on the debt, went from a surplus of R$126.0 billion to a deficit of R$249.1 billion in 1 year. In other words, a worsening of R$375.1 billion in the period. In the last available data, the deficit had been R$252.9 billion.
The daily rate of debt increased from R$0.7 billion per day to R$2.3 billion per day. Gross debt has already risen by R$1 trillion under Lula.
O Power360 questioned the Ministry of Finance about the arguments presented by Paulo Guedes’ team. The agency did not respond. The space remains open for demonstrations.
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