Gov’t expenditures against pandemic add up to R$620.5 bi: Ministry

The estimated deficit in public accounts sank to R$831.2 billion

Published in 23/12/2020 - 15:14 By Wellton Máximo - Brasília

The expenditures of the Brazilian government linked to the efforts to tackle the COVID-19 pandemic amounted to R$620.5 billion, the Economy Ministry reported Tuesday (Dec. 22). Of this, R$588.9 billion will affect this year’s primary deficit and R$31.6 billion will impact public accounts in 2021.

Most of the R$31.6 billion to be spent next year is reported to be earmarked for the purchase of vaccines, which should take up R$20 billion in extraordinary credit in the 2021 budget. The remaining R$11.6 billion is directed to the “remaining payables” (the funding for a year carried over to the next one) for three ministries: Citizenship, Health, and Labor and Social Security—and to the reopening of a credit line for the Ministry of Health.

Of expenditures executed this year, most were put towards the payment of the emergency allowance, which used up R$321.8 billion. Second came the aid program for states and municipalities, with disbursements of R$60.2 billion. Third is the program for contract suspension and reduction of the workday, with R$ 51.5 billion.

The Economy Ministry unveiled the year’s last report on the emergency expenditures authorized by Congress during the pandemic. Because of the public calamity state, the target for the primary deficit (negative balance of government accounts not considering public debt interest) was suspended. The extraordinary credit linked to the so-called war budget was excluded from the cap on federal spending.

Primary deficit

The economic staff revised the federal government’s estimated primary deficit  down this year. The projection went from R$844.6 billion to R$831.8 billion billion. The difference stemmed almost entirely from the transfer of R$11.6 billion in remaining payables and credit reopening for the coming year.

For next year, the target for the primary deficit approved by Congress corresponds to R$247.2 billion for the Central Government (National Treasury, Social Security, and Central Bank). The target is said to include the R$20 billion for the purchase of vaccines.

In line with recent estimates brought forward by the Economy Ministry, the document reports a 4.5 percent shrinkage in the Brazilian economy in 2020 a 3.2 percent increase in 2021. Gross debt should close out the year at 92.3 percent of the country’s gross domestic product (GDP), compared to the previous forecast of 94.4 percent. The projection for net debt was retained at 66.5 percent of the GDP.

No extension

Despite the hike in the COVID-19 caseload late this year, Special Finance Secretary Waldery Rodrigues said the government does not intend to extend measures of economic stimulus. For now, the economic team plans to focus on the immunization plan and the remaining payables. “Should there by demands linked to any of these measures in 2021, we’re willing to show we’re ready to respond. This is a time for stock-taking and serenity,” he declared.

Translation: Fabrício Ferreira -  Edition: Nélio de Andrade

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