The Independent Fiscal Institution (IFI), of the Federal Senate, projected that the Gross Debt of the General Government (DBGG) could reach 95.3% in relation to GDP by 2031. The Fiscal Monitoring Report (RAF) for the month of November was released this Friday (18). Gross debt is the index that measures the total indebtedness of the country.
According to the IFI, the PEC of the Explosion is one of the main factors for the increase in this public debt, since the potential increase in the primary expenses of the Union is of R$ 173.1 billion for 2023, in addition to opening a space of R$ 103 .3 billion in the spending cap for next year.
The IFI also assessed that the lack of a mechanism to limit expenditure growth and the lack of prospects for an increase in public revenue generated this increase in the debt projection.
Another factor evaluated by the IFI was the expected deterioration in the primary result of the central government, which would go from a surplus of 0.5% of GDP in 2022 to a deficit of 0.9% of GDP next year. The institution warns that to stabilize the debt at 76.6% in 2022, a primary surplus of 1.5% of GDP would be necessary, which is far from the projection.
“In the base scenario, the expectation is that spending will reach 19.7% of GDP in 2031. In alternative scenarios, primary spending varies basically depending on macroeconomic parameters, such as inflation and GDP and different assumptions for investments and the program. conditional cash transfer program”, highlights the document.
The IFI also revised the projection for the DBGG in 2022 to 76.6% of GDP. However, the institution states that this scenario should be reversed in 2023, due to the expected worsening of the primary result of the central government, which would go from a surplus of 0.5% of GDP in 2022 to a deficit of 0.9% of the GDP next year.
The Fiscal Monitoring Report is produced monthly by the IFI and provides situational assessments of the macroeconomy and the fiscal situation.
Source: CNN Brasil
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