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Brazil Is Spending Less and Finance Minister Is Quite Happy

Between January and November, Brazil’s primary surplus – the savings achieved by the government to ensure debt payments – attained US$ 42.268 billion (98.6 billion reais), equivalent to 5.6% of the Gross Domestic Product (GDP).

According to data released on Friday, December 23, by the Brazilian Central Bank, the consolidated public sector, which includes the accounts of the federal government, states, municipalities, and State enterprises under federal government control, amassed a primary surplus of US$ 1.543 billion (3.6 billion reais) in November.

In an interview the Brazil’s Minister of Finance, Antonio Palocci, admitted that the primary surplus may exceed the government’s year-end target of 4.25%, but he said that this is because states, municipalities, and State enterprises will contribute more than their projected share to meet the target.

He commented that he considers positive the effort made by government leaders to spend less. "I am not going to quarrel with states and municipalities because they are saving more. I will congratulate them."

According to Palocci, contrary to what critics of his policy of fiscal restraint claim, "the availability of investments has not been impaired."

He affirmed that the government’s savings do not limit the ministries’ investments in projects and programs. "The availability of funds for the Ministries has been determined for several months."

The Minister recalled that, historically, December is marked by a "big deficit," since it is the month in which the government makes payment on its investment commitments.

"Now that we’re making all this planning result in a good fiscal situation, better for Brazil, and we are not going to quarrel with the balance. We are not going to quarrel with the fiscal effort, because it is good for Brazil," he underscored.

Agência Brasil

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  • Show Comments (3)

  • Guest

    One of Mr.Cardoso\’s Devilish heritages
    The previous Government has increased the debt four times, even after the almost total sale of brazilian “jewel of crown” state companies. That was the pernicious heritage of the irresponsible government Fernando Henrique Cardoso. It’s like a cancer, a devil desease to fight against. The fiscal policy is the weapon to fight against the government debt, and Lula has been using it to combat the government debt. A 20% percent increase is not an accurate figure. In any case, the “increase” on the debt is decreasing year after year since Lula took the Government, and it’s not out of control like the situation was when Mr. Cardoso was the president of Brazil. It’s in course in Brazil a promising tendency of controlling the “monster” of government debt by reducing the official interest rates.

  • Guest

    spending less ?
    Then how could anyone explain that the government debt increased by 20 % in one year ???????? The increase was from 800 billions Reais to 959 billions.

    Hidden and trunked numbers as usual from this government. The debt pile increased to 959.5 billions Reais at the end of November.
    A massive increase of 149 billions reais during the first 11 months of this year. Or 18.3 % growth in total debt.

    And worse, so much debt increase during a spending austerity ! Smile….

    Where did the money go, in view of the budget spending austerity ?

    Quite contradictory !

    In simple maths, even a debt growth of 15 % compounded makes the total debt double every 5 years or quadruple every decade !

    This is simply unsustainable.

    Therefore your government is just lying for the rosy pictures they want to make you believe.

  • Guest

    Lula\’s miracle!
    Lula has been in government for just 3 years and has already suceeded to reinsert Brazil in the way of development. INFLATION is well controlled in a 5% year rate; EMPLOYMENT rate is rising up slowly, but regularly ”“ 4,5 million new jobs has already been created by Lula’s Government; FOREIGN DEBT being honored and corresponds now to 1.4 times the country’s GDP, 3 years ago it was as high as 4.4 times the GDP! ”“ also the country has fully repaid IMF in advance; FOREIGN TRADE performing exceptional results – in 2005 hit an astonishing US$44 billion trade surplus; Healthy INTERNATIONAL RESERVES valued U$57 – the highest ever registered; FISCAL POLICY is highly responsible, recording annual surplus of 5.6% in the domestic accounts, pushing down the domestic debt.
    Besides the optimistic economical figures, the social policy in Brazil has being effective and its results also starts to show up: for the first time in Brazilian statistical historical series the income difference between richest and poorest population started to decrease. They both are becoming healthier, but the poor stepping faster than rich.
    For all these reasons the risk for investment in Brazil is sharply falling down and now it ranks about 300 – close to the long ago wanted investment grade premium.

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