Public Finance: Gross Fixed Capital Formation of the Government drops 9.1% in 2016
May 04, 2018 10h00 AM | Last Updated: May 07, 2018 03h46 PM
The Gross Fixed Capital Formation, as measured by the Government Intermediate Account, fell in the municipal, state and federal spheres, ranging from R$101.9 billion in 2015 to R$92.7 billion in 2016. According to Public Finance Statistics, the Government's net borrowing reached R$450.8 billion. This figure corresponded to 7.2% of the country's gross domestic product in that year. There was a decrease of 12.9% in the net borrowing in nominal terms, compared to 2015. These are some pieces of information from the Public Finance Statistics and the Government Intermediate Account for 2016, prepared by the IBGE in partnership with the National Treasury Secretariat (STN) and the Central Bank of Brazil, whose complete publication can be accessed on the right of this page.
In 2016, the General Government Net Borrowing (which refers jointly to the finances of municipal, state and federal administrations) reached R$-450.8 billion, which was equivalent to 7.2% of the GDP for that year. There was a decrease of 12.9% compared to 2015, when the net borrowing was R $ 517.6 billion.
In 2013, the net borrowing represented 2.9% of the GDP, going to 5.8% in 2014 and 8.6% in 2015, falling to 7.2% in 2016. In 2016 the result was mainly influenced by the decrease of net expenditures with interest, from R$505.3 billion in 2015 to R$375.1 billion in 2016. This reduction was more than enough to compensate for a lower growth pace of tax and social contribution revenues (4.6% and 4.9%, respectively) and the increase in expenses with social benefits (13.6%). Net operating revenue, excluding transactions with non-financial assets, declined 9.8%, reaching R$-459 billion.
| Table 1: Public Finance Statement | ||||||
|---|---|---|---|---|---|---|
| Operation Statement - General Government1 | Valores correntes (R$ 1,000,000) | |||||
| Central Government | State Governments | Municipal Governments | Consolidation | General Government | ||
| Transactions affecting net worth | ||||||
| 1 | Revenue | 1,842,984 | 776,971 | 567,114 | -556,099 | 2,630,970 |
| 11 | Taxes | 800,507 | 505,058 | 123,744 | 0 | 1,429,309 |
| 12 | Social contribution | 583,066 | 57,540 | 47,403 | 0 | 688,008 |
| 13 | Transfers / Donations | 640 | 156,081 | 326,652 | -483,347 | 26 |
| 14 | Other revenue | 458,771 | 58,292 | 69,315 | -72,752 | 513,626 |
| 2 | Expenditures | 2,268,445 | 839,280 | 538,336 | -556,099 | 3,089,962 |
| 21 | Employees's compensation | 251,578 | 300,494 | 261,378 | 0 | 813,450 |
| 22 | Use of goods and services | 77,919 | 99,008 | 163,510 | 0 | 340,437 |
| 23 | Consumption of fixed capital | 30,232 | 35,126 | 30,840 | 0 | 96,198 |
| 24 | Interest | 638,693 | 80,343 | 9,442 | -72,752 | 655,726 |
| 25 | Subsidies | 27,188 | 1,196 | 346 | 0 | 28,729 |
| 26 | Transfers / Donations | 354,379 | 132,765 | 811 | -483,347 | 4,607 |
| 27 | Social benefits | 870,970 | 151,501 | 39,011 | 0 | 1,061,482 |
| 28 | Other expenses | 17,487 | 38,849 | 32,998 | 0 | 89,334 |
| Gross operating profit - GOP (1-2+23) | -395,228 | -27,184 | 59,618 | 0 | -362,794 | |
| Net operating income - NOI (1-2) | -425,460 | -62,310 | 28,778 | 0 | -458,992 | |
| 31 | Net investment in non-financial assets | -10,114 | -5,395 | 7,310 | 0 | -8,199 |
| Net Lending (+) / Borrowing (-) (1-2-31) | -415,346 | -56,915 | 21,468 | 0 | -450,793 | |
| Memo items | ||||||
| 1, | Expenditures, excluding consumption of fixed capital | 2,238,213 | 804,155 | 507,496 | -556,099 | 2,993,764 |
| 2, | Gross acquisition of fixed assets | 23,409 | 29,722 | 38,120 | 0 | 91,251 |
| 3, | Primary Net Lending (+)/Borrowing (-) | -106,256 | 17,277 | 13,286 | 0 | -75,693 |
| Source: 1, Ministério da Fazenda. Secretaria do Tesouro Nacional, 2, IBGE, 3, Banco Central do Brasil, | ||||||
| Note 1: Methodological information is available in the technical notes of the publication. | ||||||
The General Government Gross Fixed Capital Formation (GFCF - covering the three administrative spheres) continued its downward trend. from R$101,9 billion in 2015 to R$92,7 billion in 2016. which represented a nominal reduction of 9,1%, All government spheres declined in this aggregate. and the sharpest one was in the state sphere. where GFCF fell 13,6%. going from R$34,5 billion in 2015 to R$29,9 billion in 2016,
In 2016, the value added by the three government spheres reached R$909.6 billion, a nominal growth of 5.9% compared to 2015. The participation of municipal governments in the value added was 31.6% in 2014, declined to 31.4% in 2015 and increased to 32.1% in 2016. The federal and state spheres each lost 0.3% in the same period from 2015 to 2016.
