The possibility of an overflow in the spending ceiling made the government contingency (block) R$ 1.722 billion from the 2022 Budget, the Ministry of Economy recently announced. According to the ministry, the blockade will be necessary to recover expenses with the civil service, which were underestimated, and to increase subsidies.
The blocking of funds was disclosed today (22) in the Bimonthly Report on the Evaluation of Revenues and Expenses, a document that guides the execution of the Budget and is published every two months. The distribution of cuts by the organs of the Federal Executive Branch will be disclosed in a presidential decree to be published by the end of the month.
The contingency is much lower than the R$ 28.9 billion cut in the 2021 Budget. In the first Income and Expenses Assessment Report last year, R$ 19.8 billion in expenses and contingencies were vetoed (definitely cancelled) temporarily) R$ 9 billion. In the following four months, the blocked amount was fully released.
According to the report, the estimate of expenses with the federal civil service for this year was revised from R$ 336.102 billion to R$ 338.551 billion, an increase of R$ 2.448 billion. The forecast of spending on subsidies, including the Safra Plan, was revised from R$13.378 billion to R$18.472 billion, an increase of R$5.094 billion.
The increases in some expenditures were partially offset by the review of other expenses, such as salary bonuses and unemployment insurance (-R$1.446 billion) and other mandatory expenses (-R$2.105 billion). Even so, the new estimates would break the spending ceiling by R$ 1.722 billion, which justifies the blocking of resources.
primary deficit
By including BRL 23.838 billion in extraordinary credits for the payment of Auxílio Brasil, expenditure estimates rose BRL 32.705 billion in relation to the Budget sanctioned in January. The impact on public accounts will only be greater because, according to the Ministry of Economy, gross revenue forecasts jumped R$ 87.492 billion, even with the recently granted exemptions on fuels and industrialized products.
When discounting transfers to states and municipalities, net revenues increased by R$ 41.967 billion. As revenues will increase at a faster pace than expenditures, the report reduced the estimate of the primary deficit for this year, from R$ 76.167 billion to R$ 66.906 billion.
The primary deficit represents the negative result of government accounts before the payment of interest on the public debt. Official estimates are much more optimistic than the amount approved in the 2022 Budget Guidelines Law, which stipulates a primary deficit target of BRL 170.474 billion for the Central Government (National Treasury, Social Security and Central Bank).
Revenue
In terms of revenue growth, most of the increase comes from improved employment and unmanaged revenue such as oil royalties. The estimated collection of taxes administered by the Federal Revenue fell by R$ 3.293 billion in relation to the amount sanctioned in the Budget. On the other hand, the projection for revenues from oil and energy royalties jumped by R$ 38.638 billion, benefited by the increase in oil prices due to the war between Russia and Ukraine.
The Social Security net revenue forecasts increased by R$ 27.934 billion, driven by the recovery of formal employment, whose workers contribute to the National Social Security Institute (INSS). Estimates for the distribution of profits and dividends from state-owned companies were also increased, by R$12.94 billion, and for federal concessions, by R$11.206 billion.
