With the presence of the Ministers of Finance, Fernando Haddad, and Planning, Simone Tebet, the federal government should announce a freezing of resources in the 2025 budget to comply with the tax rules. Ministers’ participation in the press interview of the Bimonthly Revenue and Expenses Report, a document that updates the budget projections.
The presence of the economic team holders also increases the expectation for the announcement of additional measures to contain spending and raise the collection. It is the first time since the beginning of the government that Haddad and Tebet participate in the bimonthly report.
Usually, the presentation is conducted by the executive secretaries or even by the budget secretaries, the National Treasury and the IRS-who will also be present tomorrow.
Last week, Haddad stated that he would present to President Luiz Inacio Lula da Silva specific measures to comply with this year’s fiscal target. This year’s fiscal goal is zero result (balance between expenses and revenues), with tolerance range between R $ 31 billion deficit and surplus of R $ 31 billion, or 0.25% of Gross Domestic Product (GDP). The budget was approved by Congress with an expected surplus of $ 15 billion.
“You can’t talk about a package. These are specific measures, none of scale, to comply with the fiscal target,” he said. “There is no package, there is a set of measures that are common management of the serious administration that is being made to fulfill what was established with society,” he said.
The executive secretary of the Ministry of Finance, Dario Durigan, anticipated, in an interview with the State of S.Paulo, that the government must make a block and contingency in this year’s first budget update, in order to show commitment to the fiscal target.
Continues after advertising
The blockage occurs when the expense limit of the tax framework is exceeded. The contingency happens due to lack of revenues to meet the target of primary result.
According to experts, the approved budget has underestimated expenses and overestimated revenues. In the case of spending, concerns are the same: social security benefits and care, such as the continued benefit (BPC).
On the collection side, the government has about $ 168 billion in extraordinary revenues to close this year’s accounts. These include, for example, the entry into the public coffers of R $ 28.5 billion for the Board of Fiscal Resources (Carf).
Continues after advertising
Last year, initially, the initial forecast was for revenue of $ 56 billion with the tax tiebreats, but the end result was less than $ 1 billion.
In the evaluation of Warren Investimentos’s chief economist, Felipe Salto, the bimonthly should bring a relevant but insufficient budget cut. In its accounts, it would be necessary to freeze from $ 25 to $ 30 billion, but the government should announce around $ 15 billion, especially considering the good performance of the collection at the beginning of the year.
“The fact is that, given the good performance of the first quarter, the government will hardly defend, in this week’s report, a more robust adjustment. It should choose, as we have said, for the strategy of evaluating, throughout the year, the dimension of the slowdown of activity and revenues, then deciding on the increase in initial spending containment,” he said in a report.
Continues after advertising
For the economist to Brazil from Barclays, Roberto Secemski, it would be necessary to freeze about $ 10 billion, between blockade and contingency.
“We believe that an initial containment of over R $ 15 billion could be well received by investors as a sign of prudence; the higher the freezing, the more confident the markets would feel the fulfillment of the goal,” he said.
