Government reduces budget block to R $ 121.5 billion until May
The government of President Luiz Inacio Lula da Silva (PT) updated on Wednesday (30) the budget restriction values that will be valid until the end of May. The expected blockade fell from R $ 128.4 billion to R $ 121.5 billion, according to the Budget and Financial Programming Decree (DPOF) signed by Lula and published by the Ministry of Planning and Budget.
The new determination replaces the provisional decree-nicknamed the “hole-tape”-which was in force due to the delay in the 2025 budget approval. The update reflects technical adjustments resulting from the recently sanctioned Annual Budget Law (LOA), and does not represent a political decision-making decision.
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According to the economic team, the reduction of R $ 6.9 billion stems from the revision in income and expenses estimates, which changed the overall value of the locks imposed on budget execution. In practice, the block acts as a limit to commit resources – that is, to officially compromise funds that will be paid later, in the last phase of budget execution.
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With the new decree, the ministries are allowed to commit only 1/18 (an eighteen) of the annual expense per month until November. Total release happens only in December, when the remaining values can be used.
The rule is divided into three steps:
- January to May: R $ 121.5 billion blocked;
- June to November: expected restriction of R $ 66.4 billion;
- December: remaining values released in full.
The strategy of scaling commitments throughout the year is used to control cash flow and maintain fiscal balance in the goals set by the new framework. The measure also offers margin for future adjustments if revenue frustration or increased mandatory expenses.
