driven by increase in collection in January, the Central Government accounts – National Treasury, Social Security and Central Bank – started 2022 with a record surplus. Last month, the result was positive at R$ 76.539 billion.
This was the best result for all months since the beginning of the historical series, in 1997. The second best result was registered in October 2016 (surplus of R$ 52.9 billion at current prices) and in September 2010 (R$ 51.1 billion at current prices). On both occasions, however, the surplus had been inflated by atypical revenues.
The primary surplus represents the saving of resources by the government disregarding the payment of interest on the public debt. The January result came better than expected by financial institutions. According to the Prisma Fiscal survey, released every month by the Ministry of Economy, market analysts had expected a positive result of R$44 billion last month.
In October 2016, there was a repatriation of funds held by Brazilians abroad. At the time, the government granted an amnesty to anyone who brought money back into the country, without being charged with the crime of evasion of foreign currency. In 2010, the result was boosted by the capitalization of Petrobras, during the transfer of rights of oil in the pre-salt layer.
Despite the surplus in January, the Budget Guidelines Law (LDO) stipulates a primary deficit target of R$ 170.5 billion for this year. The 2022 General Budget of the Union reduced the deficit estimate to R$ 79.3 billion, but the amount taken into account for the fulfillment of the fiscal goals is that of the LDO.
atypical collection
The January result of this year resulted from the increase in revenues and the relative stability of expenses. Last month, net revenues grew 30.5% compared to January last year in nominal terms. Discounting inflation, growth was 18.2% above the Broad Consumer Price Index (IPCA). Total expenses grew 12.9% in nominal values and 2.2% above the IPCA in the same comparison.
Last month, two factors boosted revenue growth: the atypical collections of Corporate Income Tax and Social Contribution on Net Income resulting from higher-than-expected profits by companies and the postponement of payment of Income Tax quotas in 2021, because of the second wave of the covid-19 pandemic. As the measure was not repeated this year, the collection rose beyond what was expected.
The R$ 8.1 billion growth in the payment of royalties it also helped the federal coffers. Revenues rose 81.9% above inflation in January compared to the same month a year ago, driven by the rise in international oil prices, which are at their highest in eight years because of the conflict between Russia and Ukraine.
Expenses
On the expenditure side, spending on mandatory expenses with flow control increased, which rose R$5.6 billion (+53.9%) above inflation in January compared to the same month in 2021. The rise was driven by the payment of the minimum benefit of R$ 400 from Auxílio Brasil.
On the other hand, spending on federal employees fell by 6.9% discounted inflation, reflecting the freezing of salaries of civil servants that took effect between June 2020 and December 2021. Expenses with Social Security fell by 1.3%, also considering inflation, because of the reform approved in 2019.
Regarding investments (public works and purchase of equipment), the federal government invested R$ 742 million in January, a decrease of 21.5% compared to the same month of 2021, discounting inflation by the IPCA. The retreat occurs against a weak basis of comparison. In January of last year, the Budget had not been approved, and all investments were carried out only with payables (amounts authorized in previous years).
