verni20168 ‘Analyzing public spending in Brazil -The Brazilan Report wo v > IN c > Zz i Brazil is undergoing an extremely sensitive economic moment. Public debt is rampant, investments are down, and the government doesn’t seem to be able to rationalize public spending. According to the Treasury Department, the public sector registered a BRL 13.5 billion primary deficit in June alone. Meaning that, even without taking into consideration the interest rates over the debt, the federal government's revenues is not enough to pay for its expenses. hitps:braciin reportimoneyi2016\8/02/analying-public-spencing-razilterizo18 Analyzing ple spending n Braz -The Brazitan Report Primary result, in BRL bn (@iJune 2018 (upto June) Ml Jun'17- Jun 18 Central gov. Local gov. State-owned companies 20 60 -80 razilian Report Sot k + Get the data « Created with Datawrapper The next president will step into office already facing the possibility of not being able to meet the so-called “golden rule,’ which stipulates that Brazil can only increase its debt to pay for investments - the money can’t be used for basic expenses, such as wages. Breaking this rule is an impeachable offense. Due to the continuous deficits that have haunted the central government since 2014, breaking the golden rule appears inevitable in the opinion of economists at the Ministry of Finance. To avoid the worse, the administration is studying “legal alternatives” which would include amending the Constitution. Another solution could be a bill authorizing the government to break the rule during a specific time frame. But a vote like that has no chance of passing before the October election. Not even the federal spending cap approved by the government in 2016 has managed to rein in the federal budget. Without reforms, Brazil would need a 5-percent annual GDP growth rate in order to return to the black - and that's not happening any time soon. hitps:braciin reportimoney/2016\0/02/analyzing-public-spencing-razill aitsvari2018 ‘Analyzing puble spending in Brazil- The Brazilan Report Markets predict a mere 1.5-percent GDP growth for this year. In 2019, the rate should rise ‘tono further than 2.5 percent. Dissecting public spending The government's basic expenses have eaten up roughly 80 percent of the total public spending in 2018. Investments, on the other hand, have dried to the bare minimum. We have compiled data from the Directory for Analysis of Public Policy of think tank Fundagao Getulio Vargas. You can compare how the government has managed the federal budget, spanning from the last year of Fernando Henrique Cardoso, to Lula's 8 years, Dilma Rousseff's 6 years, and Michel Temer two and a half years. Type of expenditure, per share of the GDP Public resources spent eked 2002 2004 2006 2008 2010 2012 2014 2016 Chart: The Brazilian Report « Source: DAPP-FGV « Get the data + Created with Datawrapper ‘nps:tocazian ropormoney/2018/08/0z/analyzing-public-spencing-brazll ait