Government announced R$3.8 billion in contingencies and R$11.2 billion in blockages
A “containment” of R$15 billion announced by the government’s economic team is greater than the Budget of 19 of the 39 ministries of Luiz Inacio Lula da Silva (PT). The freezing of the accounts is in place to maintain expectations of the new fiscal framework and to keep the primary result within the range of the zero deficit target.
The Minister of Finance, Fernando Haddaddeclared on July 18 that the 3rd Bimonthly Revenue and Expenditure Report for 2024 should present a block of R$11.2 billion and a contingency of R$3.8 billion.
O Ministry of Environment and Climate Change is the one with the amount that comes closest to the total of blocked and contingent amounts, R$14.4 billion. The amounts are available in Transparency Portal.
Read below the comparison of the frozen value with the organs:
In some cases, the “containment” is almost 30 times larger than the budget of a ministry. This proportion was observed in relation to Human Rights and Citizenship, with resources totaling R$531.1 million.
In relation to social benefits, the frozen money is equivalent to 9.0% of the resources allocated to Bolsa Família and 28% of the New PAC (Growth Acceleration Program).
Read the comparison below:
The comparison made by Poder360 aims to demonstrate the real size and what the announced blockages and contingencies represent. The agencies and programs mentioned will not necessarily be affected by the restrictions in the budget. The details will be released on Monday (22.Jul.2024) in the bimonthly report.
A “CONTAINMENT”
Haddad and other economic ministers were responsible for announcing the “containment” of R$ 15 billion in the 2024 Budget.
Understand the difference between blocking and contingency:
- block – the government reviews the budget expenditures, which were higher than allowed by the fiscal framework. It is more difficult to reverse;
- contingency – occurs when there is frustration of expected revenues in public accounts.
The objective is to comply with the rules of the fiscal framework after the frustration in the calculation of revenues and the higher than expected increase in mandatory expenses.
President Lula gave the go-ahead for the budget freeze. He met with economic ministers at Planalto on July 18 to discuss the matter. The following were present:
The government has committed to balancing the public accounts. The goal is for spending during the year to equal revenue, i.e., a zero deficit is expected. In practice, it is necessary to increase revenue and cut spending. The market was skeptical about the government’s efforts to achieve its goals. The announcement of blockages and contingencies improves perception.
Measures related to spending are seen as more accurate. While revenue collection has numerous variables that can affect revenue estimates, expenses depend only on a cut to be included in the calculation.
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