Higher inflation will reduce relaxation of spending ceiling by R $ 8 billion, Funchal says

Special Secretary of the Treasury and the Budget of the Ministry of the Economy, Bruno Funchal. Photo: Ministry of the Economy

The recent spike in inflation could reduce the relaxation of the federal spending ceiling by 2022 by at least 8 billion reais. The statement was made on Friday (13) by the special secretary of the treasury and budget of the ministry of ‘Economy, Bruno Funchal. . This will happen, he said, because several expenses, such as pensions, unemployment insurance and wage premiums, are corrected by the National Consumer Price Index (INPC).

Funchal detailed the impact of inflation on the spending limit by videoconference with investors. According to the secretary, the INPC is expected to close the year at 7.2%, 1 percentage point above the last official projection, presented in July, which indicated an increase of 6.2%. “We are a passenger in the inflation that is coming. Considering the current market projection for the INPC [no acumulado do ano], we would have already lost 8 billion reais out of the 33.5 billion reais that we are projecting with a soft cap, ”he said.

Approved at the end of 2016, the expenditure ceiling rule limits public expenditure growth to inflation. The indicator used is the Extended National Consumer Price Index (IPCA) from July of the previous year to June of the current year. Over the period, the IPCA has accumulated 8.99%. The INPC, which measures the inflation of the poorest families, rose 9.85%, with expectations of slowing down a bit by the end of the year. The information comes from Agência Brasil.

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