Analysis: Increase in non-mandatory expenses deteriorates fiscal balance
The National Treasury released, this Monday (29), the results of the central government's accounts, which recorded a primary deficit of more than R$53 billion. According to analyst Lucinda Pinto, at Hora H, the rise in mandatory expenses is the main factor in the deterioration of the country's fiscal framework.
According to Lucinda, the central government recorded a primary deficit of R$53.257 billion, driven largely by expenses that are not mandatory - the so-called discretionary expenses. The data reveals a worrying gap between public revenues and spending.
In May alone, government revenue grew 5.5%, while expenses increased 9.4%. Non-mandatory expenses, in turn, registered a significant growth of 128%, within what Lucinda classified as a "package of kindness" adopted by the government.
"We are seeing a very important evolution in government expenses that are not being offset by revenue, which is reaching a record level", said the analyst.
The evolution of total expenses also drew attention: they went from R$2.39 trillion to R$2.63 trillion in the period analyzed. Lucinda highlighted that, to increase revenue and finance this level of spending, the government needs to charge more taxes, which directly impacts the productive sector and the population.
Risk of slowdown worsens the scenario
An additional point of concern raised by Lucinda concerns the ongoing monetary policy. "With this interest rate level, what the Central Bank intends is precisely to pull the brakes, bring about a slowdown", explained the analyst.
As the economy slows down, the rate of revenue tends to fall, making it even more difficult to sustain the current level of expenses. "We are not talking about a discussion in two years. It is here for 2027, for the next government", he warned.
Financial market operates with reduced volume
At the close of the market this Monday, the Ibovespa registered a drop of 0.05%, with a trading volume of around R$10 billion - approximately half of what is usually handled on a normal day.
The dollar rose slightly, ending the day at R$5.17. For the next few days, Lucinda highlighted that the market will be attentive to labor market data, which could influence bets around a possible interest rate cut of 0.25 percentage points at the next Central Bank meeting.
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Source: CNN