Brazilian Federal Government Triples Investments in Two Years

Brazil’s federal government invested a total of US$ 8.061 billion (18.4 billion reais) last year, 60% more than in 2004, when US$ 4.906 billion (11.2 billion reais) were invested, and nearly triple the US$ 2.847 billion (R$ 6.5 billion) spent on investments in 2003.

According to the interim minister of Planning, João Bernardo Bingel, the government will have sufficient funds to pay between US$ 6.133 billion (14 billion reais) and US$ 6.571 billion (15 billion reais) of what it plans to invest in 2006. This amount surpasses the US$ 5.038 billion (11.5 billion reais) it paid in 2005.

Operating expenses and investments in 2005 added up to US$ 36.276 billion (82.8 billion reais), US$ 36.013 billion (82.2 billion reais) of which were committed. The federal government liquidated US$ 32.376 billion (73.9 billion reais) of its obligations, including US$ 2.409 billion (5.5 billion reais) in pending debts from previous years.

According to the ministry’s technical analysis, the first year of Lula’s Administration was marked by the need to effect a drastic fiscal adjustment in government accounts, in order to regain credibility, control inflation, and reduce the Brazil risk premium.

2003, therefore, was a year in which the level of investment was low. Investments began to recover in 2004 with the Investments Pilot Project (PPI), a set of strategic projects excluded from the calculation of the primary surplus.

These projects, basically aimed at infrastructure improvements, accounted for US$ 1.533 billion (3.5 billion reais) in 2005, while direct highway investments amounted to US$ 1.971 billion (4.5 billion reais).

The State also began to invest once again in railways, which it had not done since the privatization of lines belonging to the Federal Railway Network, and included the North-South Railway in the PPI, providing it with US$ 141 million (324 million reais).

According to Bingel, it will take more than a year to conclude the construction of major railways, such as the North-South (from São Luí­s, Maranhão, to Anápolis, Goiás) or the Transnortheastern (traversing the interior of Pernambuco, Ceará, and Piauí­). But "we shall certainly complete some stretches," he affirmed.

Agência Brasil

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