Extra edition of the Official Gazette of the Union on Monday night (September 30) brought a decree with details about the new freeze
The president’s government Luiz Inácio Lula da Silva (PT) announced this Monday (September 30, 2024) that it will block R$ 974.8 million in commission amendments (RP8) and R$ 3.67 billion in New PAC (Growth Acceleration Program).
In total, the blockade is worth R$13.3 billion. Here is how the new expense limitation will work:
The ministries of Health (R$ 4.50 billion) and the Cities (R$ 1.76 billion) had the biggest contentions. The Budgetary and Financial Programming Decree was published overnight in an extra edition of Official Gazette. Here’s the complete (PDF – 468 kB).
After the publication of the decree, the bodies will have 5 working days to indicate the programs to be blocked.
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CONTAINMENT
Lula’s government announced on Friday (September 20) that it reversed the contingency of R$3.8 billion which it had done in the 3rd two months due to the increase in revenue. In return, it blocked an additional R$2.1 billion in discretionary (non-mandatory) expenses in this year’s Budget.
The measure is in compliance with the new fiscal framework, which establishes the spending limit to comply with the law. In practice, there was the release of R$ 1.7 billion in spending in the 2024 Budget.
With the reversal, the resource freeze drops from R$15 billion to R$13.3 billion. The data was published in the Income and Expense Assessment Report for the 4th two months of 2024. Here is the complete of the document (PDF – 3 MB).
The blocked amount is for discretionary expenses while the contingency is made due to revenue frustration. Earlier, the Power360 found that the containment would be less than R$5 billion.
“The increase in the blockade results from the increase in mandatory expenses, mainly due to the update of the estimate for small value requests – RPV by the Federal Court”says the Ministry of Planning and Budget.
ROMB PROJECTION
The federal government reduced the estimated deficit in public accounts in 2024 to R$ 28.3 billion. The previous projection was released in July and presented a deficit of R$32.6 billion.
The new estimate exceeds the center of the fiscal target for this year by R$28.3 billion, which establishes a tolerance interval of 0.25 pp (percentage point) of GDP (Gross Domestic Product) for the primary balance.
In practice, the government can spend up to R$28.8 billion more than revenue. The goal itself is zero deficit, but there is this margin of tolerance.
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