On Monday (24), during a meeting promoted by the Brazilian Banking Federation (Febraban), the Executive Secretary of the Ministry of Finance, Dario Dorrigan, spoke about the supposed achievements of the PT administration in the budget field.
He said that the government this year achieved the best results in public accounts in a decade, and expected for 2026 to achieve the first primary surplus (excluding interest expenses) in several years, as a result of strict and continuous financial control – the largest in the past three decades, with an increase in tax revenues and containing expenses.
It would be great – if it were true.
If we observe the historical series of statistics released by the National Treasury, it can be seen that the largest recovery in the recent period occurred during the period when the spending cap included in the Constitution was in force from 2016 onwards.
There was an improvement of more than R$400 billion in annual and inflation-adjusted values, with a peak primary surplus of R$130 billion in July 2022.
Since then, there has been a deterioration in annual results of more than R$160 billion, starting with Jair Bolsonaro’s (PL) re-election attack, and culminating in the spending generated by Luiz Inacio Lula da Silva (PT) since before the start of his third term.
If we take the nominal result into account, including public debt burdens, the collapse becomes even more severe. We have gone from a deficit equivalent to 4.4% of GDP to 7.7%, which means an additional bill of about R$400 billion per year.
There must be clarity regarding these very serious problems, because the first thing to do to solve them is to accept them.
Lula’s government favors deniability, supported by case-by-case rules, which provide for serial exceptions in recorded expenditures to achieve official goals. It is the basis of the self-deception exposed by the Executive Secretary of Finance.
Looking to the future, the scenario is not encouraging, especially as the election period approaches. Among the measures already contracted, there is great potential for increased spending.
This list includes income tax exemptions and deductions for individuals, totaling about R$30 billion in 2026. Even if the amount is offset by taxes on the rich, there is an impact on activity that makes it difficult to lower interest rates.
Added to this are new rules for court orders (R $ 13 billion), nest eggs (R $ 12 billion), and people’s gas (R $ 5 billion), as well as credit for public housing renovation (R $ 40 billion) and investments of the armed forces outside the financial limit (R $ 5 billion).
Instead of thinking about how to contain the spiraling public debt, Lula and his team are considering new benefits, such as providing free public transportation. This indicates the degree of distance from the reality of this administration.
Editorials@grupofolha.com.br