The Secretary of the National Treasury, Mansueto Almeida, reported today (30) that the deficit in public accounts could exceed R$ 350 billion this year. In an interview to present the fiscal result for February, Mansueto said that this year “will be quite atypical”, due to measures to combat covid-19.
“There will be very strong pressure on the expenditure and collection side, in the months of April, May and June”, he said in an interview broadcast on the internet.
Mansueto cited government programs to face the crisis with an impact on public accounts, such as extra unemployment insurance, credit for small and medium-sized companies with subsidies from the National Treasury, payment of R$ 600 for informal workers, the postponement of payment by the federal government of Simples Nacional, advance of social security benefit (13th salary) and salary bonus.
informal workers
Mansueto stated that for the payment of informal payments, data from the social assistance network, public programs, the National Institute of Social Security (INSS), the single registry, etc.
Regarding the value, Mansueto said that R$ 600 per worker is not little and highlighted that it is an emergency program. “We are in a country where 50% of people who have a formal contract earn less than two minimum wages per month,” he said.
O secretary said that the possibility of further reducing federal taxes must be analyzed very carefully. “Any measure to increase expenses or reduce revenue increases the fiscal hole”, he recalled.
Increase in expenses
The secretary highlighted that there should not be a permanent increase in expenses, after the crisis. “It is essential to have control so that temporary expenses do not become permanent. If that happened, we would put the entire fiscal adjustment path at risk. That is why it is very important that all actions with economic and social effects are restricted to 2020”, he said.
Mansueto said that economic activity was recovering, before the crisis hit Brazil, and that the government was making adjustments to the economy. “It is a good thing that we are going through such a difficult circumstance after having approved the pension reform, having made several structural adjustments to the economy, including a scenario of very low inflation and very low interest rates”.
He also stated that Brazil has a structural problem, which is to spend practically everything it collects, since 2015, to pay mandatory expenses. “That's why it's so important for us to focus on a structural fiscal adjustment, to control the growth of mandatory expenses. The first big step was taken with the approval of the Social Security reform, but there is still much more to be done. But at least, this is the first year after four years that we don't have all the contests scheduled. There was a stop for the government to reorganize itself and there is no increase in the salary of civil servants”, he said.
deficit war budget
Mansueto defended the proposed amendment to the Constitution (PEC) that creates a budget segregated from the government's fiscal budget to face the new coronavirus pandemic. According to him, the approval of this measure is important so that the political decision to face the crisis is not impeded by fiscal rules. “That's why this good dialogue with the National Congress is so important for the approval of this PEC of the war effort, which will regulate all this part of public finances in periods of public calamity”, said Mansueto.
February result
Although February, the government's primary deficit, expenditures (not considering interest expenditures) higher than revenues, reached R$ 25.857 billion. According to Mansueto, the result was impacted by the increase in transfers from the Union to states and municipalities. “There was an increase in transfers to states and municipalities due to the increase in collections in January,” he said. However, these transfers amounted to R$ 33.397 billion, with a real increase (excluding inflation) of 9.6%.
In the first two months of 2020, there was a primary surplus of R$ 18.275 billion compared to a surplus of R$ 11.799 billion in 2019.
Although the primary result of the Central Government (National Treasury, Social Security and Central Bank) accumulated in the 12 months until February 2020 was a deficit of R$ 90.8 billion, equivalent to 1.21% of the Gross Domestic Product (GDP), the sum of all goods and services produced in the country. Therefore, the Central Government's primary result target for 2020 was a deficit of R$ 124.1 billion, equivalent to 1.64% of GDP. But due to expenses to face the covid-19 pandemic, the public calamity decree exempted the government from complying with fiscal results.
