Federal government invested 60% more in 2005

05/01/2006 - 14h33

Stênio Ribeiro
Reporter - Agência Brasil

Brasília - The federal government invested a total of US$ 8.061 billion (R$ 18.4 billion) last year, 60% more than in 2004, when US$ 4.906 billion (R$ 11.2 billion) were invested, and nearly triple the US$ 2.847 billion (R$ 6.5 billion) spent on investments in 2003.

According to the interim minister of Planning, João Bernardo Bingel, the government will have sufficient funds to pay between US$ 6.133 billion (R$ 14 billion) and US$ 6.571 billion (R$ 15 billion) of what it plans to invest in 2006. This amount surpasses the US$ 5.038 billion (R$ 11.5 billion) it paid in 2005.

Operating expenses and investments in 2005 added up to US$ 36.276 billion (R$ 82.8 billion), US$ 36.013 billion (R$ 82.2 billion) of which were committed. The federal government liquidated US$ 32.376 billion (R$ 73.9 billion) of its obligations, including US$ 2.409 billion (R$ 5.5 billion) in pending debts from previous years.

According to the ministry's technical analysis, the first year of Lula's Administration was marked by the need to effect a drastic fiscal adjustment in government accounts, in order to regain credibility, control inflation, and reduce the Brazil risk premium. 2003, therefore, was a year in which the level of investment was low. Investments began to recover in 2004 with the Investments Pilot Project (PPI), a set of strategic projects excluded from the calculation of the primary surplus.

These projects, basically aimed at infrastructure improvements, accounted for US$ 1.533 billion (R$ 3.5 billion) in 2005, while direct highway investments amounted to US$ 1.971 billion (R$ 4.5 billion). The State also began to invest once again in railways, which it had not done since the privatization of lines belonging to the Federal Railway Network, and included the North-South Railway in the PPI, providing it with US$ 141 million (R$ 324 million).

According to Bringel, it will take more than a year to conclude the construction of major railways, such as the North-South (from São Luis, Maranhão, to Anápolis, Goiás) or the Transnortheastern (traversing the interior of Pernambuco, Ceará, and Piauí). But "we shall certainly complete some stretches," he affirmed.

Translation: David Silberstein