Ministry of Health also faced cut of R$4.4bn
07/31/2024
The federal government released the Budget and Financial Programming Decree on Tuesday night (30), detailing a freeze of R$15 billion in expenditures. The document outlines a cut of R$4.5 billion from the new Growth Acceleration Program (PAC), and a limitation of over R$1 billion on parliamentary budget amendments.
Among federal agencies, the Ministry of Health was the most affected, facing a freeze of R$4.419 billion. Following were the Ministries of Cities (R$2.133 billion); Transportation (R$1.512 billion); Education (R$1.284 billion); and Social Development, Family, and Hunger Combat (R$924 million).
In a statement, the Ministry of Planning and Budget (MPO) emphasized that the freeze distribution followed “guidelines to preserve the allocation of resources in health and education (constitutional minimums), ensure the continuity of public policies for the population, and maintain the federal government’s commitment to the fiscal result target set for 2024.”
From now, ministries and agencies “have until August 6 to adopt adjustment measures and carry out the procedure for indicating the programs and actions to be blocked.”
The freeze was announced by Finance Minister Fernando Haddad in mid-July. The measure aims to meet both the federal government’s primary result target and the spending limit imposed by the fiscal framework.
By type of expenditure, the freeze was mainly concentrated on the discretionary spending of the Executive Branch—in other words, funds indicated by the agencies themselves over which the government has control. This spending category faced a containment of R$9.256 billion.
Limitations on Novo PAC expenditures, also executed by ministries but with a specific budget marker, totaled R$4.5 billion, concentrated mainly in the ministries of Health, Cities, and Transportation. Earlier this month, Planning Minister Simone Tebet stated that the freeze would only affect uninitiated construction works.
Regarding Congress-indicated spending, the containment focused on committee amendments (R$1.095 billion), which are not mandatory. Mandatory block amendments faced a limitation of R$153 million, while individual mandatory amendments were spared.
The primary result target for this year is a zero deficit, with a tolerance range of 0.25 percentage points of GDP, up or down. This range is approximately equivalent to R$28.8 billion. The ministries of Finance and Planning and Budget currently project a negative result of R$28.8 billion, at the lower limit of the range, for 2024. The fiscal framework limit is R$2.116 trillion.
The MPO noted that the containments might be revised throughout the execution.
*Por Estevão Taiar — Brasília
Source: Valor International