Public accounts have a deficit of R$ 50 billion in August with the payment of judicial debts

The payment of judicial debts by the Union and the conclusion of an agreement to end the dispute over Campo de Marte led the central government’s accounts to record a deficit of R$ 50 billion in the month of August, the worst result for the month since 2020, when the country needed to open its coffers to face Covid-19.

The result, released by the National Treasury this Thursday (29), shows that the government spent more than it collected last month. The data includes the National Treasury, Social Security and Central Bank accounts.

With this data, the primary result (difference between government revenues and expenditures, excluding interest revenues and expenses) accumulated in the year reached R$ 22.2 billion. In this comparison, the balance is the best for the period since 2013, after discounting the effects of inflation.

Last month, the Treasury reported that a batch of payment of precatories (as judicial debts are called after a final judgment) had been postponed from July to August at the request of the CNJ (National Council of Justice). These transfers totaled R$ 25.3 billion, and their impact on the accounts was already expected by the government.

The Campo de Marte agreement, in turn, led the Ministry of Economy to make a merely accounting record of the payment of R$ 23.9 billion to the São Paulo City Hall to end the historic dispute over ownership of the area. But there was no effective disbursement of this amount because, in the settlement, the Union reduced the value of the municipality’s debt with the federal government, which was extinguished.

The operation ends up worsening the result because, on the one hand, the federal government gave up financial revenues of around R$24 billion — but they do not enter the primary balance account. On the other hand, the Union had to record the expense, in the amount of compensation to the municipality of São Paulo.

Even with these atypical events, the official projection of the Ministry of Economy, updated on September 22, indicates that the central government’s accounts will end the year in the dark for the first time since 2013. The balance forecast by the government is R$ 13.5 billion.

The result is far from the one authorized by the LDO (Budget Guidelines Law), which allows for a deficit of up to R$ 170.5 billion.

Minister Paulo Guedes (Economy) and his assistants have highlighted that the effective result of the accounts in 2022 will be positive, thanks to the significant growth in revenues.

Last year, the consolidated public sector had a positive result, but driven by the performance of states and municipalities.

In August, the Federal Revenue recorded a collection of R$ 172.3 billion, which represents a record for the month. The real growth, already discounting the inflation of the period, was of 8.21% in relation to August of last year.

The economic team also has extraordinary gains, such as the payment of more dividends from state-owned companies – a request forwarded by the folder itself to the banks, to reinforce the cash.