Stênio Ribeiro         Reporter Agência Brasil

Brasília – The draft bill of the 2013 budget guidelines (“Lei de Diretrizes Orçamentárias – PLDO”) maintains the government’s target of spending (“meta governamental de investir”) R$955.1 billion in the second phase of the Accelerated Growth Program (“PAC2’) between 2011 and 2014.

According to the spread sheet (“planilha”) that is part of the draft bill, R$127 billion was executed last year with the result that R$828.1 billion will have to be spent this year and in 2013 and 2014.

However, the big numbers were projected by the government’s economic team last April, that is, in a much more optimistic environment where, according to minister of Finance, Guido Mantega, domestic demand was “robust” and the Ministry of Finance official forecast for GDP growth at that time was 4.5%.

Since then, economic growth forecasts have been cut in half as consumption levels have fallen due to family indebtedness.

In spite of a different macroeconomic scenario, the Congress approved a PLDO with few changes in the government’s grand targets. The goal of a primary surplus of R$155.9 billion, or 3.1% of GDP, stands (the executive branch including the Social Security system (União”) will be responsible for economizing R$108.1 billion, or 2.15% of GDP).

The bill does admit a possible future reduction of the primary surplus due to changes in net public debt as a percentage of GDP. In 2011, the ratio of debt to GDP was 39.1%. The government has said it wishes to reduce that to less than 30% by 2014.

For 2013, the draft bill forecasts primary revenue of R$1.226 trillion (24.39% of GDP) with primary outlays of R$1.118 trillion (22.24% of GDP).

Allen Bennett – translator/editor The News in English

Link - LDO mantém meta de investir R$ 955 bilhões no PAC2 de 2011 a 2014