Public Finances: Government Net Borrowing records decrease of 12.4% in 2018
December 19, 2019 10h00 AM | Last Updated: December 19, 2019 06h07 PM
According to the Public Finances Statistics, government net borrowing was R$ 478.8 billion, having recorded a decrease of 12.4% against the 2017 figure. The result was due to an increase (8.2%) of total revenue versus a change of 4.2% in total expenditure in the three spheres of government. Gross Fixed Capital Formation, measured by means of the Government Intermediate Account, increased in all spheres of government, with a change from R$ 80.3 billion in 2017 to R$ 93.9 in 2018, that is, a positive 16.9%. These are some data presented in Public Finances Statistics and Government Intermediate Account 2018, developed by the IBGE in partnership with the National Treasury Secretariat and the Central Bank of Brazil. From this publication onwards, results will refer to the preceding year. Therefore, this year’s report presents data of 2018. The complete publication is available on the right of the page.
In 2018, Net Borrowing of the Public Administration registered in the Public Finance Statistics was R$ 478.8 billion, with a decrease of 12.4% in relation to 2017. This result was due to the increase of 8.2% in total revenue in comparison with a 4.2% change of total expenditure of the three spheres of government.
| Table 1: Public Finances Statement | ||||||
|---|---|---|---|---|---|---|
| Operation Statement - Public Administration1 | Current values (1 000 000 R$) (on Dec 31) | |||||
| Central Government | State Governments | Municipal Governments | Consolidation Column | Public Administration | ||
| Transactions affecting net worth | ||||||
| 1 | Revenue | 2,003,231 | 859,831 | 629,060 | -647,303 | 2,844,819 |
| 1.1 | Taxes | 976,789 | 551,545 | 130,231 | 0 | 1,658,565 |
| 1.2 | Social contributions | 646,877 | 42,947 | 59,004 | 0 | 748,828 |
| 1.3 | Transfers / Donations | 917 | 234,849 | 360,814 | -596,494 | 85 |
| 1.4 | Other revenue | 378,648 | 30,490 | 79,011 | -50,809 | 437,340 |
| 2 | Expenditure | 2,481,853 | 899,718 | 605,367 | -647,303 | 3,339,635 |
| 2.1 | Employee compensation | 290,953 | 328,430 | 292,032 | 0 | 911,416 |
| 2.2 | Use of goods and services | 72,908 | 117,817 | 186,021 | 0 | 376,745 |
| 2.3 | Fixed capital consumption | 34,103 | 38,305 | 34,304 | 0 | 106,711 |
| 2.4 | Interest | 598,127 | 60,739 | 5,352 | -50,809 | 613,408 |
| 2.5 | Subsidies | 23,701 | 756 | 373 | 0 | 24,829 |
| 2.6 | Transfers / Donations | 447,564 | 151,604 | 980 | -596,494 | 3,654 |
| 2.7 | Social benefits | 994,040 | 173,141 | 50,485 | 0 | 1,217,666 |
| 2.8 | Other expenses | 20,458 | 28,927 | 35,821 | 0 | 85,206 |
| Gross operating result - ROB (1-2+23) | -444,520 | -1,583 | 57,997 | 0 | -388,106 | |
| Net operating result - ROL (1-2) | -478,622 | -39,887 | 23,693 | 0 | -494,817 | |
| Transactions with ono-financial assets | ||||||
| 31 | Net investment in non-financial assets | -11,211 | -2,923 | -1,842 | 0 | -15,976 |
| 311 | Fixed assets | -8,813 | -3,057 | -2,104 | 0 | -13,973 |
| 312 | Stocks | 169 | 134 | 262 | 0 | 565 |
| 313 | Valuables | 52 | 0 | 0 | 0 | 52 |
| 314 | Non-produced assets | -2,620 | 0 | 0 | 0 | -2,620 |
| Net lending (+) / borrowing (-) (1-2-31) | -467,411 | -36,965 | 25,535 | 0 | -478,840 | |
| Memorandum items | ||||||
| 1. | Despesa, excluindo consumo de capital fixo | 2,447,750 | 861,413 | 571,064 | -647,303 | 3,232,924 |
| 2. | Gross acquisition of fixed assets | 25,290 | 35,248 | 32,200 | 0 | 92,738 |
| 3. | Primary net lending (+)/ borrowing (-) | -93,574 | 20,690 | 18,707 | 0 | -54,178 |
| Sources: 1. Ministério da Economia, Secretaria do Tesouro Nacional. 2. IBGE. 3. Banco Central do Brasil. Note 1: Methodological information is available in the technical notes for this publication. |
||||||
From the perspective of revenue, accounting for this performance there was the increase of groups of taxes on goods and services (8.9%), taxes on property (9.5%), taxes on trade and international transactions (25.8%) and property income (14.6%). Among the taxes on goods and services, the highlights are: Contribution for Social Security Funding and Contribution to the Social Integration Program (PIS/COFINS), with an increase of about 10%, and an impact on the shares of fuels in the second semester of 2017, and effects of currency depreciation (14.5% on the average) and of the increment in volume of exports in the period.
The rise of exports was also reflected in the increase of tax collection on imports, the main component of taxes on trade and international transactions, which increased 25.7% in 2018. The performance of property taxes was influenced by tax collection from real estate, mainly in the municipal sphere, a category recording an increase of 12.8% in the period. Considering property income, the highlight was Financial Compensation, also influenced by currency depreciation. Besides the hike in the international price of petroleum, and revenue from dividends, mainly from Caixa Econômica Federal.
In Public Finances Statistics, net expenses (expenses minus revenue) with interest recorded deceleration, with a change from 2.0% from 2017 to 2018 (from R$ 416,4 billion to R$ 424,7 billion), against an increase of 11.0% from 2016 to 2017. Total social benefits also recorded a positive change (1.6%) in the year, versus about 13% in 2017. Compensation increased 5.2%, versus a change of about 6% in the previous year.
In the case of social benefits, the difference of performance between the two years was mainly due to the permission of money withdrawal from inactive accounts of the Guaranteed Severance Fund (FGTS, in Portuguese), granted in the year 2017, but not in 2018.
The benefits of social security, which encompass, mainly, the benefits of the Social Security System recorded a positive change of 4.5%, below the increase of 8.9% observed in the previous year. The other social security benefits, including withdrawals from the Guaranteed Severance Fund, recorded a decrease of 2.4%. Apart from the effect of withdrawals from inactive accounts in 2017, other social security benefits changed by 7.3%.
Gross Fixed Capital Formation (FBCF), obtained from the Intermediate Government Account, increased in all spheres of government, with a change from R$ 80.3 billion to R$ 93.9 billion, a positive change of 16.9%. That was the biggest change, mainly due to municipal spending, since there was increase in investments (38.7% in 2018, after a 40% decrease in the previous year. State governments recorded an increase of 9.4%, being close to the position in the preceding year, whereas the federal government recorded a positive change of 6.5%, versus a 0.9% increase in the previous year.
The Government Intermediate Account provides an initial weighting for the value added of public administration, and, as a result, of its contribution to the calculation of the Gross Domestic Product for 2018 in the Annual National Accounts, and its composition considering spheres of government. In 2018, it was observed that government value added reached R$ 1,016,8 billion, an increase of 4.9% in nominal terms in relation to 2017. The change was positive in all government spheres. The federal government increased 4.7%, a little below the change of States (4.9%) and Municipalities (5.0%), having kept stable the participation of all government spheres in total gross value added versus the previous year.
