This is the primary result, which will be below the tolerance limit of the fiscal target (which is 0.25%); with spending to rebuild Rio Grande do Sul, the percentage would rise to 0.37% of GDP
The Minister of Finance, (PT), said this Tuesday (7.Jan.2025) that the primary deficit of the federal government’s public accounts will be 0.1% of GDP (Gross Domestic Product) in 2024. If confirmed, this percentage will be below the tolerance limit of 0.25% of GDP established for the result by the law that created the fiscal framework.
The primary deficit is the calculation of the deficit in public accounts that does not consider spending on interest on the federal debt. For 2024, the National Congress also requested that spending by the president’s government (PT) on works and actions to rebuild Rio Grande do Sul, hit by floods, be left out of the accounts.
“We will finish 0.1%. The 2nd place after the decimal point may vary depending on whether the GDP is higher or lower than expected”said the minister. The statements were made in the early afternoon of this Tuesday in a live interview with the news channel GloboNewswhich belongs to Grupo Globo.
The cost of actions with Rio Grande do Sul, according to Fernando Haddad, was 0.27% of GDP. Therefore, the deficit would be 0.37% with these expenses taken into account, according to Haddad. But because of the decision to purge this from federal accounts, the percentage of the gap will be just 0.1%.
UNDERSTAND THE CALCULATION OF THE TAX TARGET
The government defined that spending in 2024 must be equal to expenses. In other words, a zero deficit is expected. However, the fiscal framework defines a tolerance interval of 0.25 pp (percentage point) of GDP for the indicator annually.
Entities have already criticized the economic team for seeking to meet the fiscal objective through the so-called “band”, which should serve to accommodate unexpected events.
