Government allocates R$ 3.3 billion to release spending by ministries amid the budget crisis

The Ministry of Economy reallocated R$ 3.3 billion in expenses that were classified as mandatory for discretionary spending by ministries, which have been suffering from limitations at the end of the year.

According to the Ministry’s Special Secretariat for the Treasury and Budget, the reallocations were made on Tuesday (6), by means of an ordinance, after the reassessment of the forecast payments to be made this year.

In a note, the folder said that there was a technical justification presented by the ministries that these mandatory expenses will not be financially executed until the end of the year.

“These rearrangements of financial limits (payment schedules), from expenditures classified as ‘mandatory’ to others classified as ‘discretionary’ is a regular measure of governance, with the aim of improving allocative efficiency in each ministry”, he said.

Of the total relocated, the Ministry of Health accounts for R$ 2.3 billion. There are also reallocations of BRL 300 million in the Economy, Education and Citizenship portfolios, in addition to other changes in smaller amounts.

The crisis in this year’s accounts occurs even after the Jair Bolsonaro administration’s spending ceiling was relaxed to pay social benefits outside the fiscal rule.

The expansion of mandatory expenses put pressure on the Budget, which led the Ministry to announce a total need to block BRL 15.4 billion in November.

With the lock, the government now has available for all discretionary expenses of ministries in December —which include investments and scholarships and also administrative expenses such as electricity and water bills— only R$ 2.4 billion, equivalent to 1 .6% of the total for the year.

With the scarcity of resources, the Federal Police even suspended the issuance of passports, while water distribution services by water trucks in needy regions also experienced difficulties – these actions were recomposed, according to the government. Universities also report difficulties in honoring commitments.

According to the Treasury and Budget secretariat, this week’s allocation of funds means releasing R$ 3.3 billion more for discretionary expenses, but does not necessarily represent an unblocking of funds that were blocked.

The ministry also said that it continues to monitor the demands of the various bodies and works to meet these demands.