Brazil’s Accumulated Federal Investment Spending Drops 16.3 Percent This Year

RIO DE JANEIRO, BRAZIL – Amid the growth in compulsory spending, investments – construction and equipment purchases – accumulated a drop in 2019.

According to figures released yesterday, December 27th, by the National Treasury, investments totaled R$35.2 billion from January to November, down 16.3 percent in relation to the same period last year, discounting official inflation as measured by the Broad National Consumer Price Index (IPCA).

Expenditures with the Growth Acceleration Program (PAC) totaled R$18.734 billion from January to November, a 17.8 percent drop over the same months last year, discounting inflation. Expenditures on the ‘Minha Casa, Minha Vida‘ (“My Home, My Life”), the main federal government housing program, have accumulated a 6.9 percent drop, discounting inflation, reaching R$3.709 billion through November.

From January to November, net revenues accumulated a 0.7 percent drop, discounting inflation. Total expenses dropped 0.8 percent excluding inflation, but several compulsory expenses remain high. Social welfare expenditures rose 3.1 percent over inflation, against a 1.1 percent hike (also above inflation) in staff spending.

However, other compulsory expenditures have accumulated a 6.6 percent drop, discounting inflation, mainly due to spending that occurred last year, but not repeated this year, such as the payment of compensation under the Kandir Law, expenses with election campaign financing, and diesel fuel subsidies after the truckers’ strike.

Expenses with the Student Finance Fund (-42.5 percent), payroll relief (-27.3 percent) and subsidies and grants (-30.8 percent) also dropped.

Expenses with maintenance costs accumulated a 7.6 percent drop, discounting inflation for the first ten months of the year. The drop was the result of contingency planning (blocking) of resources that remained in effect for most of the year and of the pooling of resources, which totaled R$37.3 billion from January to November.

Last month, the government released all suspensions in 2019. The release was possible due to the government’s extraordinary revenues from revenue on the sale of state-owned subsidiaries and from the transfer of oil and gas rights at auctions.

Source: Agência Brasil

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