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EFE / Fernando Bizerra Jr.
The National Congress approved on Wednesday evening (11) the draft of the LDO (Budget Line Act) with deficit forecast in the public accounts next year and the following year. 39, authorization for this The text provides a deficit of 132 billion reais [1 945 903] (1.75% of GDP) for the public sector as a whole – that is to say, the l 39; increase in the salaries of civil servants . , it's the amount that the government intends to spend beyond what it expects to increase, not to mention paying interest on the debt.
The LDO forecast confirms 2019 as the sixth year the government will close the accounts in the red. In 2019, he will succeed to the next president, who will be chosen in the elections of October
During the vote in Congress, deputies and senators also overruled the rapporteur's proposal to prohibit the readjustment of salaries and the creation jobs in the public service. It has also been cut the proposal to require a saving of 5% in the spending of public bodies, in expenses such as electricity, telephone and daily bills.
Restrictions were defended by the government economic space to avoid increased spending and deterioration in public accounts
It is not yet possible to know the impact of this decision on public accounts in the coming year. The LDO has only published salary readjustments, but has not determined any concrete proposals for increase.
However, the forecast of the economy with the postponement of readjustments planned for the coming year was about R $ 6 billion .
"We have a government inheriting a structural deficit that was created in the previous government between 2011 and 2015," says the FGV professor of public finance
"This situation should lead to action cautious in finance laws, and Congress to rethink adjustments in costs and payroll, "he says.
For Kasnar, Despite the fact that it is right to restore inflationary losses for civil servants, the government must be cautious so that increases above this level do not result in deterioration public accounts
"The budget law must at least reflect the adjustments, it would be the right minimum to maintain the power of purchase of the server," he says. "This must be done with care and an extraordinary negotiation so as not to put families and the private sector on a sacrificial road, "says Professor FGV
This will be the third budget prepared under the constitutional amendment of the Ceiling for the finance specialist Amir Khair, the spending ceiling forces the government to tackle the fiscal deficit solely for the sake of the public deficit.
The most effective would be to seek measures that would reduce the per cent the budget devoted to interest on the debt.
"More and more, this government has embarked on a trampoline path that it has created," he says. "It's about reducing expenses," says Khair, "but it's a path not only politically thorny, but financially limited."
This year, the refinancing of the public debt should consume $ 1 trillion, which represents 28.9% of the entire federal budget (federal, state and municipal). By comparison, the health forecast is equivalent to 5.2% of this year's budget, or 121.4 billion reais.
Khair defends to maintain the Selic (basic interest rate) at a level close to the inflation index, which could lead to the reduction of default with the consequent recovery of credit . "The default will fall and you unlock the economy, and unlock the economy, it generates revenue," he says.
What is the LDO?
The LDO serves as a kind of guide for the country's annual budget. It was approved by Congress late Wednesday near the end of the deadline for legislators to go on vacation. According to the Constitution, Congress can not stop if it approves the new LDO only on July 17th.
The LDO will now be sent to the government, which will use it in the development of LOA (Annual Budget Law), detailing all the revenues and expenses planned for next year.
At the end of August, the government must send the letter of intent to be voted by Congress. The last step is the sanction of the budget next year by President Michel Temer (MDB).
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