Government blocks more $5.88 billion of budget

The frustrated revenue due to the worsening economic crisis has made the Brazilian government further tighten the belt and announce an additional block of $5.88 billion of this year's federal budget. The amount was reported in the Evaluation Report for Revenues and Expenses, released Tuesday (22) by the Ministry of Planning, Budget, and Management.

With the new cap, the amount of discretionary (non-mandatory) costs blocked in the budget rises to $ 12.36 billion. In February, the economic staff had cut $6.49 billion of funds.

The cap may be reduced during the year if the Chamber of Deputies and Senate approve the supplementary bill sent Tuesday (Mar. 22) to Congress with fiscal reform measures. Among the proposals, there is an authorization for the government's essential expenses not to be cut in case the economy grows less than 1% per year.

The government plans to send to Congress another bill to alter the Budget Directive (LDO) and allow the federal government to end the year posting a primary deficit of $16.69 billion. To reach the new fiscal target, the bill proposes to reduce up to $23.34 billion from this year's fiscal target, according to Finance Minister Nelson Barbosa. Of this total, $20 billion correspond to the frustrated revenue—$8.46 billion in administered revenue (taxes levied by the Internal Revenue Service) and $11.57 billion in non-administered revenue (transactions with assets, state-led companies dividends, and revenues from public concessions).

The $3.33 billion remaining are equivalent to the government's authorization to spend $830 million on actions to prevent dengue, chikungunya fever, and Zika virus, and $2.49 billion on the Accelerated Growth Program (PAC) works, which are suspended.

Translated by Amarílis Anchieta

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