Minister Haddad goes out of his way to explain ROMBO in public accounts

Minister Haddad goes out of his way to explain ROMBO in public accounts
Minister Haddad goes out of his way to explain ROMBO in public accounts
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According to Fernando Haddad, Minister of Finance, the current deficit in public accounts is a consequence of the payment of court orders that were in arrears, pending issues relating to the previous government. In 2023, the deficit resulted in negative R$230.54 billion, a number surpassed only by 2020, when the deficit reached R$743.25 billion due to the COVID-19 pandemic crisis.

Understanding the primary deficit

The primary deficit is defined as the negative result of government accounts, without taking into account interest on public debt. “This result is the expression of a decision that the government took to pay the default given before, both in the precatório and in the governors in relation to the ICMS on fuels”, declared Haddad in an interview last night.

Impact of payment of court orders

According to the National Treasury, without the payment of court orders, the Central Government’s accounts – which include the National Treasury, Social Security and the Central Bank – would have ended last year with a negative result of R$138.1 billion, the equivalent of 1.3% of the Gross Domestic Product (GDP). Without the financial aid of approximately R$20 billion for states and municipalities, the deficit would have been reduced to R$117.2 billion, therefore 1.1% of GDP.

Measures taken by the government

Government debts with a final court ruling, known as court orders, had their payment paid in installments or postponed after a constitutional amendment in 2021. Last year, the government decided to pay off the debt to avoid a liability of R$250 billion at the end of 2026. In December, the primary deficit was R$116.15 billion, an amount driven by the payment of outstanding court orders.

Fiscal Prisma and future perspectives

The Prisma Fiscal survey, carried out monthly by the Ministry of Finance, shows that the market expected a negative result of R$35.5 billion, without considering the payment of court orders. However, despite the payment of court orders, the deficit remained within the target established by the Budgetary Guidelines Law (LDO) of R$231.5 billion for the Central Government.

The article is in Portuguese

Tags: Minister Haddad explain ROMBO public accounts

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