Starting this Thursday (27), states and municipalities and enterprises in the New Growth Acceleration Program (New PAC) will be able to borrow an additional R$3.1 billion from the financial system in 2025. At a meeting, the National Monetary Council (CMN) increased the credit limit to serve local governments.
The total credit that public entities (Union, states, municipalities and state-owned companies) can contract in 2025 exceeded R$21.426 billion, established in Januaryto R$24.526 billion.
In order not to compromise the fiscal target of the states and municipalities, the Ministry of Finance informed that the R$ 3.1 billion were reallocated from the Fiscal Adjustment Programs and the Fiscal Monitoring and Transparency Program (PAF), the estimated amount of which will not be fully used this year.
The changes were as follows:
- expansion of the limit for contracting credit operations guaranteed by the Union for subnational entities, from R$9.5 billion to R$12.1 billion;
- expansion of the sublimit for credit operations guaranteed by the Union covered under the New PAC, from R$2.7 billion to R$2.9 billion; and
- expansion of the limit for contracting credit operations without Union guarantee for subnational entities, from R$4.3 billion to R$4.6 billion.
Operations guaranteed by the Union are those in which the National Treasury covers possible defaults. The money is later recovered with a reduction in mandatory transfers from the federal government to states and municipalities.
In a note, the Ministry of Finance explained that the limits originally set for 2025 – both for operations with and without a Union guarantee – were practically exhausted. In the case of operations related to the New PAC, approximately 85% of the sublimit, with and without a guarantee from the Union, has already been committed.
In January of each year, the CMN defines the limit and sub-limits for contracting credit by public bodies for the following 11 months. Until now, the CMN had internally rearranged the credit sublimits, without changing the contracting ceiling, but, in this Thursday’s decision, the total limit was increased.
