Government investment in infrastructure last year is the lowest in ten years | Economy

Over the last two years, public investment has been affected by the public expenditure ceiling, which states that total expenditures (with some exceptions such as capitalization by the state) can not exceed the change in government spending. Inflation in 12 months June of the previous year.

The measure aims to contain the successive deficits in the public accounts since 2014. Over the past four years, the value of the balance of the accounts has exceeded R $ 100 billion and, in 2018, the primary deficit (expenditure above $ 1 billion). interest on the public debt) amounts to 120 billion rubles.

GOVERNMENT INVESTMENT IN INFRASTRUCTURE

IN BILLION R $ (CORRESPONDING VALUES BY IPCA)

Source: Treasury (19659007) Mandatory expenditure on social security and social security charges rise above inflation, the ceiling rule leaves less room for expenditures considered "discretionary" (those that can be modified by the government). This category includes federal government investments.

The government advocated a pension reform to reduce the level of compulsory spending and thus leave room for other budgetary expenditures.

Social Security reform is a priority of the government's economic team, Jair Bolsonaro, who intends to submit a proposal to the Legislative Assembly in the coming weeks. For the National Treasury, investment figures "illustrate the importance of a thorough examination of compulsory expenditure and fiscal rigidities, which limit investment"

Source: National Treasury

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"It is also important to strengthen public investment management institutions and strive to prioritize projects according to the budget scenario," added the institution.

The President of the Brazilian Chamber of Construction Industry (CBIC), José Carlos Martins, noted that for 2019, the government's estimate regarding infrastructure investment is still inferior, less than R $ 20 billion. According to him, in three or four years, because of the effects of the spending ceiling, that investment can be zero.

"If the government can not, before [recursos] it has to give conditions to the private sector, it can not become the enemy of those who want to invest." In recent years, working with the federal government, control agencies, We all defend finesse, competition, competence, but we can not stop everything, "he said at the G1.

In the evaluation of Martins, the only solution to increase investments in infrastructure is a partnership between the public and private sectors.

"It's the legal certainty that is behind everyone . Nobody cares, but it seems that the government [Bolsonaro] is concerned, "he said.

According to him, the government must" regulate, say what is wrong ". he wants, give priority, let people work. "" This year, we must begin to improve, otherwise we will not recover, "he said.

For Martins, without investments in infrastructure , the country will not leave the "quagmire".

"This will not reactivate the economy if it is not by investment." Any country that must progress will experience a lack of In the past year, Brazil has invested about 1.4% of GDP, or 1.5% of GDP [todos investimentos contabilizados, não só do governo]"he said.

The Government wants to reduce "obstacles"

The Ministry of Infrastructure admitted that Brazil historically suffered from the "deficit" of investment in the infrastructure sector, adding that the proposal of the new Government is "to transfer the maximum possible badets to private initiative".

The Ministry also indicated that it would seek to "unblock projects aimed at improving the country's logistics, removing bureaucratic obstacles, ensuring legal certainty, reducing the requirements for private sector participation. new businesses and improve the quality of service provided to users ".

At the end of last year, the International Monetary Fund (IMF) released a report on public investment in Brazil, which in this case does not only cover the infrastructure sector.

The agency estimated that public investment between 1995 and 2015 was less than half of that of emerging countries and Latin America, adding that there was a "significant space" to improve the efficiency of public investment.

"Over many decades, many public investment initiatives have been launched to address these needs, but the country still lacks a lot of infrastructure, which undermines the potential growth in Brazil" said the IMF at the time.

Finally, the entity also made recommendations aimed at improving the level of public investment in Brazil. Among them: