Spending ceiling is largely responsible for keeping mandatory expenses stable, says Treasury secretary

The Secretary of the National Treasury, Paulo Valle, said this Wednesday (29) that the drop in expenses in 2021 was only possible because the spending ceiling has been holding back the growth of mandatory expenses. “The spending ceiling is largely responsible for keeping mandatory expenses at a stable level,” he said.

During a press conference on the result of the Central Government, Valle also said that the Central Government’s primary deficit in 2021 should be between BRL 89 billion, which was the previous estimate, and BRL 49.287 billion, accumulated between January and November this year.

With tax collection on the rise and expenditure on the decline, central government accounts recorded a surplus. primary in November. Last month, the difference between income and expenses was positive by R$ 3.872 billion.

According to Valle, the portfolio has not yet made a new projection, but it is possible that the gap in 2021 will be close to BRL 70 billion, which would be the best result since 2014 (-BRL 17.242 billion).

On the other hand, the consolidated public sector, which includes the accounts of the Central Government, states and municipalities, in addition to state-owned companies (with the exception of Petrobras and Eletrobras) may be positive by around R$5 billion, the first surplus since 2013 (R$ 91.306 billion).

Valle also added that the Central Government deficit this year should be the lowest since 2014 (-R$ 17.242 billion).

In November, the Central Government had a surplus of R$ 3.872 billion, the best performance for the month since 2013. In the penultimate month of 2020, the result had been negative by BRL 18.257 billion.

Until November, the Central Government primary result l was a deficit of BRL 49.287 billion, the best result since 2014 for the period.

Last year, this same result was negative by R$699.122 billion, mainly due to expenses and revenue waivers with the first wave of the coronavirus pandemic.

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Analysis

For XP, it was “another positive month for fiscal results (although a little below our expectations)”.

“Overall, the positive result for November shows that this year’s fiscal recovery continues to benefit from the cyclical increase in revenues and some control over expenditures. It is important to highlight that the expenditure ceiling was fundamental for this result, since the significant growth in revenue this year did not generate an increase in expenses by the same amount.”

(With Estadão Content)

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