After two consecutive months of positive results, public accounts closed in the red again. According to the National Treasury, in November, the Central Government (National Treasury, Social Security and Central Bank) registered a primary deficit of R$ 14.7 billion.
The negative performance for the last month was already expected, but the loss was much higher than the approximately R$ 1.3 billion predicted by financial market specialists consulted by the Ministry of Economy, in Tax Prism research. In November 2021, the surplus was almost BRL 4.2 billion.
The primary result represents the difference between revenues (that is, the financial resources received through the collection of taxes, fees, contributions, among other sources) and Central Government expenditures, excluding the payment of interest on the public debt.
According to the National Treasury, if, on the one hand, there was a real reduction in net income in November, on the other hand, total expenses increased. Comparing with the result of November 2021, net revenue was 9.4%, or BRL 13 billion, lower, while total expenses grew by 4.6%, or BRL 6.1 billion.
Among the causes of the drop in revenue are the retraction of about R$ 10.6 billion in unmanaged revenues and the drop in the collection of the Tax on Industrialized Products (IPI) due to the 35% reduction in rates.
The growth in expenses was attributed to factors such as the increase in mandatory expenses, in particular the payment of the Auxílio Brasil; payment of social security benefits, as the number of beneficiaries grew by 3.4% between October 2021 and October 2022, among others.
While Social Security alone presented a primary deficit of R$ 19.2 billion, the National Treasury and the Central Bank obtained a surplus of R$ 4.6 billion – resulting in the aforementioned primary deficit of R$ 14.7 billion – which was only not greater because there was a real increase of 7.3% (the equivalent of R$ 87.9 billion) in the sources managed by the Federal Revenue Service, such as the collection of Income Tax and Social Contribution on Net Income.
Despite last month’s negative result, the Central Government still operates with a primary surplus of R$49.3 billion when considering the performance of public accounts since the beginning of the year. In the same period of 2021, the National Treasury recorded a deficit of BRL 48.9 billion. In real terms, accumulated up to November, net revenue increased by 9.4%, while expenses increased by 2.5%.
The economic team estimates that the Central Government will end the year with a primary surplus of at least R$36.9 billion.