Government accounts have best January since 1997

The central government’s accounts started the year with a surplus of R$ 76.5 billion, the best result for a month of January in the entire historical series, which began in 1997, the National Treasury informed this Thursday (24). The figure includes the results of the Treasury, Social Security and Central Bank.

According to the Treasury, the significant increases in revenues managed by the Federal Revenue and also in non-tax collection contributed to the positive number in the first month of the year. The government’s net revenue had a real increase (inflation already discounted) of 18.2% compared to January 2021.

On Wednesday (24), the Tax Authorities had already announced that the collection totaled R$ 235.3 billion in January, a historic record in the series started in 1995.

On the other hand, expenses had a real growth of 2.2%. The explanation, according to the Treasury, is the expansion of the social program Auxílio Brasil, a substitute for Bolsa Família — a mark of PT administrations.

Since December 2021, families covered by the program receive an amount of at least R$400 per month. As a result, R$7.2 billion was paid through Auxílio Brasil in January. A year earlier, the Bolsa transferred R$ 3 billion to families.

The primary result is obtained by the difference between government revenue and expenditure. This year, the LDO (Budget Guidelines Law) authorizes a deficit of up to R$ 170.5 billion.

The government has been running deficits since 2014, with spending above its revenue. With January’s performance, the government almost closed the gap in the accounts: in 12 months, the result was negative by R$ 9.7 billion, equivalent to 0.02% of GDP (Gross Domestic Product).

“This is the smallest deficit since mid-2014,” said National Treasury Secretary Paulo Valle.

However, the Ministry of Economy itself predicts a deficit of R$ 79.4 billion for the year, a value that can be expanded. The government’s promise of reducing taxes, such as the IPI (Tax on Industrialized Products) and PIS/Cofins on diesel, tends to put pressure on the accounts and delay the turn of accounts to the blue.

The Minister of Economy, Paulo Guedes, has already announced a 25% cut in the IPI, whose impact could reach R$ 20 billion – of which R$ 10 billion would be subtracted from the federal collection. The exemption of diesel and cooking gas generates a waiver of R$ 19.5 billion, according to calculations by the economic area.

In a press conference to present the fiscal numbers, Valle also highlighted the drop in the Social Security deficit. The result of the INSS (National Social Security Institute) was negative by R$ 16 billion in January this year, against a deficit of R$ 20.4 billion in the same month of 2021.

The secretary cited as reasons for the movement the gains made with the pension reform, approved at the end of 2019, and also the increase in social security revenues, after a more critical period caused by the Covid-19 crisis.

In 2021, the government recorded a deficit of BRL 35 billion in central government accounts, the lowest in seven years. The result meant a significant reduction in relation to 2020, when the deficit totaled R$ 743.2 billion due to the pandemic – which caused a surge in public spending and brought down tax collection.