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Investment to reach lowest level in 14 years, budget bill shows

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Pressured by the increase in mandatory expenses and the spending cap, federal investments in 2023 will reach the lowest level in 14 years. The Annual Budget Bill (PLOA) provides for R$22.4 billion, 50.4% less than the amount authorized this year, according to a technical note prepared by consultants of the Chamber of Deputies and the Senate.The study says, however, that this drop "should be attenuated during the consideration of the PLOA, due to the allocation of funds through amendments."The budget bill is prepared by the government and analyzed by deputies and senators, who can redirect part of the funds to works and projects of interest to their constituencies. For 2023, R$38.4 billion in funds have been set aside for congressional amendments, an amount 137% higher than that of 2022, the technical note shows.The floor for investments was established based on the series of the National Treasury Secretariat from 2008 to 2021, updated by the variation of benchmark inflation index IPCA by Valor Data. The data for 2022, used in the technical note, is R$45.2 billion, corresponding to the amount authorized for the entire year.From January to July 2022, federal investments totaled R$23.9 billion, according to Treasury data."We are reducing investments because we need to," said Esteves Colnago, the special secretary of the Treasury and Budget, during the release of the PLOA 2023, on August 31. He said that the level of investments is historically low because of the advance of mandatory expenses, such as salaries and pensions.A good part of the expenses is pegged to inflation, so the secretary took the opportunity to say that it is necessary to "review the automaticity of the budget." In other words, he advocated a change in rules for expenses that grow automatically. Yet, he said that this is a discussion for the next administration."Public investments have already been at the lowest levels for a few years, but the 2023 figure is really impressive," said Guilherme Tinoco, a public accounts expert. "It’s very low."In his view, the priorities are poorly calibrated. "This low level certainly impacts negatively on economic growth and also on the quality of life of the population," he said. "The recovery of public investment, maintaining a minimum amount - of quality investments, we must stress -, will need to be on the...

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