by Bernardo Caram
BRASILIA (Reuters) – The legal framework in force today does not provide for the payment of Aid Brazil of 600 reais in 2023 and the additional cost of the initiative would be 50 to 60 billion reais, the special secretary of the Treasury and Budget of the Ministry said on Monday. of Economy, Esteves Colnago, emphasizing that any proposal in this sense would be a “considerable challenge” in view of the tightening of government accounts.
On Sunday, President Jair Bolsonaro promised to maintain the increased amount of aid next year. The constitutional amendment that increased the benefit from 400 to 600 reais provides for this amount only until the end of this year.
The government has until the end of August to present the 2023 Budget project. Given the current scenario, the secretary said that the proposal must be prepared without the forecast of the benefit of 600 reais.
“The legal framework that we have today does not present us with 600 reais as an obligation for the next year, the obligation that exists in a legal framework is 400 reais. Obviously, we will analyze if that comes”, said the secretary.
Colnago warned that August this year should be a difficult year due to the expansion of the budget blockade announced by the government to respect the spending ceiling, considering that he does not see a risk of “shutdown” of the public machine. For him, the ministry funds should begin to be deducted from September.
Despite this, according to the secretary, the central government is on track to end 2022 with a primary deficit close to zero or a surplus, in what could be the first positive balance of federal accounts after eight years.
In an interview to detail the projections for the government’s budget, Colnago highlighted that the federal revenue reached a record in seven of the last 12 months.
The secretary said that the term of President Jair Bolsonaro should end with a total expenditure in the year of 18.9% of GDP, a level lower than the 19.3% registered in 2018, the year of the end of the previous administration.
BLOCK ON ACCOUNTS
On Friday, the Ministry of Economy announced the need to make an additional block of 6.739 billion reais in the 2022 Budget to avoid a breach of the spending ceiling, despite having improved its forecast for the primary deficit this year.
The total need for blocking the accounts, according to the folder, was 12.74 billion reais, but 6 billion reais had already been blocked previously. Details of the bodies that will be affected will be presented by the end of the month.
Regarding the primary result, the official forecast is that 2022 will end with a fiscal hole for the central government of 59.354 billion reais, equivalent to 0.6% of the Gross Domestic Product (GDP), in view of the prospect of greater collection. The estimate made in May was for a deficit of 65.5 billion reais, equal to 0.7% of GDP, and Colnago said he expected further revisions by the end of the year.
This Monday, the ministry also presented an updated projection for the public debt. By the estimate, 2022 will end with a gross debt of 78.2% of GDP. The forecast was at 78.6% of GDP in May and 78.3% of GDP in June.
The most positive revisions for the fiscal were made even after the implementation of actions that increase government spending and generate revenue losses, such as the package that boosted social benefits months before the presidential elections and the measures that cut fuel taxes and reduced rates of import tariffs and the Tax on Industrialized Products (IPI).
In the interview, the secretary also said that the government sent a letter to state companies requesting that this year the dividend payments to the Treasury be quarterly, since part of the companies makes the transfer only every six months. The request was sent to Caixa, Banco do Brasil, BNDES and Petrobras, but Colnago considered that the latter already makes quarterly payments.
(By Bernardo Caram; edited by Isabel Versiani)
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