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Government announces blocking of over R$2.1 billion in the 4th two months of 2024
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The Federal Government announced this Friday (20) that it will block R$2.1 billion from the 2024 budget, to maintain the fiscal framework's spending target. The amount of R$2.1 billion will be added to the other R$11.2 billion, blocked in July, totaling R$13.3 billion for the year. The Ministry of Finance explained that the review is due to the increase in mandatory expenses.
The government also announced the reversal of R$3.8 billion allocated in the third two months. Considering the increase of R$ 2.1 billion in the blocked value and the reversal of the R$ 3.8 billion contingency, there was a reduction of R$ 1.7 billion in relation to the 3rd two months, going from R$ 15 billion to R$ 13.3 billion.
Blocking and contingency
Blocking and contingency are foreseen for the adjustment of public accounts, in relation to revenues or expenses. The government can block budget amounts when expenses increase, so that the fiscal framework's spending target is maintained. The annual percentage limit for spending is 2.5% per year, discounting inflation.
The contingency is adopted to meet the government's fiscal target. The adoption of the measure takes place in a scenario where estimated revenues for the year are frustrated. Funds are only frozen for discretionary (non-mandatory) expenses.
Measure was adopted to achieve the fiscal target in 2024 (Image: reproduction/Anton Petrus/Getty Images Embed)
TCU issues warning
Last Wednesday (18), the Federal Audit Court (TCU) issued a warning to the federal government about the risk of the fiscal target in 2024. The warning occurred due to overestimated revenues with the return of the “quality vote” in judgments of the Administrative Council of Tax Appeals (Carf).
The Ministry of Finance projected the collection of R$54.7 billion from Carf in 2024. With the review, the value was found to be R$37 billion. However, R$83 million was raised between the months of January and July.
In order to comply with the fiscal target in 2025, the Ministry of Finance intends to make cuts of R$25.9 billion targeting Social Security, Bolsa Família, Proagro and Seguro Defeso. The economic team intends to reduce minor expenses in ministries and readjust other programs. This year, for example, there were compensations for the amounts with the reduction of some expenses, such as the disbursements for the Aldir Blanc Policy, to Promote Culture, in R$ 1.9 billion.
Featured photo: Real, Brazilian money (Reproduction: Priscila Zambotto/Getty Images Embed)
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Government announces blocking of over R$2.1 billion in the 4th two months of 2024
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Government announces blocking of over R$2.1 billion in the 4th two months of 2024