Download Aug/2005

Aug/2005
CENTRAL GOVERNMENT FISCAL RESULT
The Central Government (National Treasury, Social Security System
and Central Bank) registered a primary surplus of R$4.3 billion in August,
raising the cumulative surplus in the year to R$49.4 billion (3.92% of GDP).
The National Treasury contributed to this result by posting a surplus of R$7.1
billion, while the Social Security System (RGPS) and Central Bank turned in
deficits of R$2.6 billion and R$216.5 million, respectively. With 28.9% growth
In August the Central
Government registered a
primary surplus of
approximately R$4.3 billion,
compared to R$5.1 billion
in July.
in IRPJ and CSLL inflows in the January-August 2005 period compared to the
same period of 2004, revenue inflows were better than previously expected by
the government.
On the expenditure side, outlays on personnel, excluding
employer contributions to civil service social security plans (CPSS), expanded
8.2%, reflecting growth that was higher than IPCA-measured inflation.
Spending on benefits increased 17.2%, approximately twice per capita GDP
growth projected for 2005, and contributed significantly to the 22.9% rise in the
Social Security deficit. Transfers to states and municipalities expanded 23.7% in
the first eight months of the year vis-à-vis the same period of 2004. The heading
of “other current and capital spending”, which includes discretionary spending,
MAIN VARIATIONS ACCUMULATED
2005/2004
DISCRIMINATION
%
Revenues
17.1%
17.5%
Treasury
15.4%
Social Security/
23.7%
Transfers
Net Revenue
15.8%
14.8%
Expenditures
17.2%
Benefits
8.2%
Payroll
17.6%
Current and Capital
turned in normal results in keeping with the traditional seasonal factors that mark
the early days of the second half of the year (expansion of 13.9% when
compared to 2004).
TABLE 1
CENTRAL GOVERNMENT PRIMARY BALANCE(*)
BRAZIL, 2004-2005
R$ Million
DESCRIPTION
I. TOTAL REVENUE
I.1. National Treasury Revenues
I.1.1 Gross Revenue
I.1.2. (-) Restitutions
I.1.3. (-) Fiscal Incentives
I.2. Social Security Revenues
I.3. Central Bank Revenues
II. TRANSFERS TO STATES AND MUNICIPALITIES
III. TOTAL NET REVENUE (I-II)
IV. TOTAL EXPENDITURE
IV.1. Payroll
IV.2. Social Security Benefits
IV.3. Current and Capital Expenditures
IV.3.1. Worker Support Fund (FAT)
IV.3.2. Economic Subsidies and Grants (1)
IV.3.3. Assistance Benefits (LOAS/RMV)
IV.3.4. Other Current and Capital Expenditures
IV.4. Transfer from Treasury to Central Bank
IV.5. Central Bank Expenditures
V. CENTRAL GOVERNMENT PRIMARY RESULT (III - IV)
V.1. National Treasury
V.2. Social Security (RGPS) (2)
V.3. Central Bank (3)
VIII. PRIMARY RESULT/GDP
JUL
AGO
2005
2005
40,193.2
31,604.4
33,960.4
-2,356.0
8,474.5
114.3
6,463.2
33,730.0
28,621.0
8,315.0
11,561.3
8,567.3
1,309.3
525.5
821.7
5,910.8
49.3
128.1
5,109.1
8,209.6
-3,086.8
-13.8
39,247.9
30,212.3
31,297.7
-1,085.4
8,952.4
83.3
6,751.1
32,496.9
28,234.7
6,724.3
11,560.7
9,627.2
1,737.4
383.6
826.6
6,679.6
22.7
299.8
4,262.2
7,087.0
-2,608.3
-216.5
JAN-AGO
2004
268,595.8
210,295.5
219,351.7
-9,056.1
57,567.6
732.6
44,226.5
224,369.2
183,387.4
52,652.6
75,294.9
54,193.7
6,136.8
2,544.3
4,800.5
40,712.1
372.2
873.9
40,981.8
58,850.43
-17,727.3
-141.3
3.61%
2005
314,584.0
247,163.4
255,118.6
-7,955.2
66,456.2
964.5
54,721.0
259,863.0
210,507.4
56,987.1
88,240.6
63,708.9
7,415.3
4,045.9
5,896.0
46,351.7
392.9
1,178.0
49,355.6
71,353.51
-21,784.4
-213.6
3.92%
CENTRAL GOVERNMENT BALANCE
BRAZIL JAN-AGO (%GDP)
DISCRIMINATION
2004
2005
Total Revenue
23.63% 24.97%
Transfers
3.89% 4.34%
Net Revenue
19.74% 20.62%
Total Expenditures
16.13% 16.71%
Primary Balance
3.61% 3.92%
(*) Data revised, subject to changes. Does not include FGTS contribution revenues or monetary restatement complement expenses as
(1) As of 2005, includes expenditures with reordering of liabilities.
(2) Contribution Revenues less Social Security Benefits.
(3) Administrative expenditures net of own revenues (includes transfers from the National Treasury).
Central Government Fiscal Result
1
Aug/2005
The August result was below that of the previous month due to the
NATIONAL TREASURY EXPENDITURES
BRAZIL, JAN-AGO (R$ millions)
DESCRIPTION
JUL
AGO
8,315.00
6,724.30
PAYROLL
8,567.30
9,627.20
Capital and Current
1,309.30
1,737.40
FAT
525.50
383.60
Subsidies
LOAS/RMV
821.70
826.60
5,910.80
6,679.60
Others
49.30
22.70
Transfers to BACEN
seasonal nature of those taxes that are calculated on a quarterly basis (CSLL,
IRPJ and the financial compensation participation quota) and paid in July. There
was no corresponding inflow in the month under analysis. On the expenditure
side, cutbacks in outflows on personnel and payroll charges (share of annual
wage bonus in July) were offset by increased current and capital expenditures. It
should be stressed that, despite the drop in unemployment that has followed
upon the process of job creation, particularly in the formal market, outlays under
the heading of the wage bonus and FAT unemployment compensation outlays
were significant. Following the scheduled availability of resources and budget
and financial program limitations imposed by the National Treasury in the
period, expenses paid by the executive branch also increased. Transfers to states
and municipalities expanded in the month as a result of transfer of financial
compensation participation quotas received in July, despite transfer of the CIDE
in that month. There were no corresponding transfers in the month of August.
Growth in National
Treasury revenues has
resulted from economic
performance in the current
year, particularly the
profitability levels of the
various export sectors
(metallurgy and mining, for
example) and regulated
services (postal services,
electricity and
telecommunications), and
international market oil
prices.
CENTRAL GOVERNMENT BALANCE
BRAZIL, JAN-AGO
314.6
350.0
2004
2005
268.6
280.0
210.5
183.4
210.0
140.0
44.2
70.0
54.7
0.0
Revenues
NATIONAL TREASURY BALANCE BRAZIL
BRAZIL JAN-AGO (% GDP)
DISCRIMINATION
2004
2005
Treasury Revenue
18.50% 19.62%
Transfers
3.89% 4.34%
Treasury Expenditures
9.43% 9.61%
5.18% 5.66%
Primary Balance
Transfers
Expenditures
For the year, the primary Central Government result has been driven by
revenues generated by the excellent economic performance achieved by the
productive sector and international oil prices. Surpassing government
expectations, the IRPJ and the CSLL collected up to August 2005 surpassed
revenues in the same period of 2004 by R$7.6 billion (28.9%) and R$3.9 billion
(28.8%), respectively.
Revenues reflecting the financial compensation
participation quota, mostly involving special participation and royalties on the
working of petroleum and gas reserves, expanded R$2.3 billion (30.1%) this
year. Taken together, these three taxes explain the almost 40% increase in the
Central Government Fiscal Result
2
Aug/2005
nominal National Treasury inflow in the period (R$36.9 billion), even though
this corresponds to no more than one quarter of the total registered under these
revenues. With the excellent performance of these taxes (IRPJ and participation
quota are shared), transfers to states and municipalities rose 23.7%, equivalent to
R$10.5 billion in nominal terms and 0.45 percentage points of GDP. Outlays on
personnel, excluding employer contributions to the civil service social security
plan (CPSS), expanded R$4.3 billion (8.2%) in nominal terms. This was higher
than inflation measured by the IPCA (7.3%), meaning that there has been slight
real growth in payroll up to the moment. In the year, most recent estimates
indicate that the federal government payroll came to R$93.4 billion, 11.6%
higher than last year. This result would represent real growth of 6.2% over the
IPCA target (5.1%). Current and capital spending was considerably more
dynamic, closing with expansion of 17.6%. The highpoints were acquisitions of
land for purposes of agrarian reform (TDA and Land Fund), which increased
93.4% over 2004, rising to a total of R$691.6 million up to August, together
Outlays on personnel are
expected to total R$93.4
billion in the year, 11.6%
more than in 2004. In real
terms, this growth
corresponds to 6.2% over
the central IPCA target in
the year (5.1%) and is a
consequence of the human
resources policy adopted
by the federal government,
particularly as regards
wage increases to specific
government careers.
with outlays on assistance benefits (LOAS/RMV), R$1.1 billion (22.8%) above
the corresponding figure through August of last year. Aside from this, mention
should also be made of atypical outlays resulting from restructuring of liabilities
(transfers to Emgea) – R$1.2 billion – and debts with the federal government,
under the terms of PESA (R$276.7 million). There was no corresponding
heading in the previous year.
SOCIAL
SECURITY
Despite growth in Social
Security
contribution revenues (15.4%),
REVENUES AND EXPENDITURES
consequent upon increased job generation in the formal market segment over the
BRAZIL, 2004/2005
last21.0
twelve months, the system deficit reached 1.73% of GDP, reflecting an
increase of R$4.1 billion (22.9%) compared to the same Revenues
period of the previous
Expenditures
year.
17.8However, the revenue increase (R$8.9 billion) should be viewed against a
In the year, the growth
of expenditures with
social security (17,2%)
overcomes the growth of
contribution revenues
(15,4%). The social
security balance to
August grows, with that,
22,9% in relation to
equal period of 2004.
17.2% rise in benefit outlays (R$12.9 billion), corresponding to more than twice
R$ biillions
the14.6
normal growth in per capita GDP projected for this ye
11.6
11.4
9.0
8.2
10.2
7.6
5.0
Aug-04
Oct-04
Dec-04
Central Government Fiscal Result
Feb-05
Apr-05
Jun-05
Aug-05
3
Aug/2005
Despite growth in Social Security contribution revenues (15.4%),
consequent upon increased job generation in the formal market segment over the
SOCIAL SECURITY BALANCE
BRAZIL, JAN-AGO (% GDP)
DISCRIMINATION
2004 2005
5.06% 5.27%
Contribution
6.62% 7.00%
Benefits
-1.56% -1.73%
Primary Balance
last twelve months, the system deficit reached 1.73% of GDP, reflecting an
increase of R$4.1 billion (22.9%) compared to the same period of the previous
year. However, the revenue increase (R$8.9 billion) should be viewed against a
17.2% rise in benefit outlays (R$12.9 billion), corresponding to more than twice
the normal growth in per capita GDP projected for this year.
Central Government Fiscal Result
4