April/2013 Vol. 19, N. 04. National Treasury Fiscal Balance

Transcription

1 April/2013 Vol. 19, N. 04 National Treasury Fiscal Balance Brasília May/2013

2 MINISTER OF FINANCE Guido Mantega EXECUTIVE SECRETARY Nelson Barbosa NATIONAL TREASURY SECRETARY Arno Hugo Augustin Filho DEPUTY SECRETARIES Cleber Ubiratan de Oliveira Eduardo Coutinho Guerra Gilvan da Silva Dantas Líscio Fábio de Brasil Camargo Marcus Pereira Aucélio Paulo Fontoura Valle HEAD OF FISCAL AND ECONOMIC STUDIES DEPARTMENT Fabiana Magalhães Almeida Rodopoulos DEPUTY HEAD OF FISCAL AND ECONOMIC STUDIES DEPARTMENT Felipe Palmeira Bardella TECHNICAL STAFF Alexandre Bueno Damado Bruno Fabrício Ferreira da Rocha Guilherme Ceccato Janet Maria Pereira Karla de Lima Rocha Roberta Moreira da Costa Bernardi Pereira The National Treasury Fiscal Balance is a monthly publication of the National Treasury Secretariat. Reproduction in full or in part is permitted, provided the source be given proper credit. Information: Phone: 55 (61) Fax: 55 (61) cesef.df.stn@fazenda.gov.br Home Page: National Treasury Secretariat Esplanada dos Ministérios, Bloco P, Anexo, 1º Andar, Ala B, Sala Brasília-DF 2

3 Contents Central Government Primary Balance...5 National Treasury Revenues...8 Grants to States and Municipalities...12 National Treasury Expenditure...14 Social Security...19 List of Tables Table 1 Central Government Primary Balance...5 Table 2 Central Government Primary Balance - % GDP...6 Table 3 Central Government Primary Revenue...8 Table 4 Dividends Received...10 Table 5 National Treasury Gross Revenue - % GDP...11 Table 6 - Grants to States and Municipalities...12 Table 7 - Grants to States and Municipalities - % GDP...13 Table 8 Central Government Primary Expenditure...14 Table 9 Other Current and Capital Expenditures Monthly Balance...15 Table 10 - Other Current and Capital Expenditures Yearly Balance...16 Table 11 Economic Subsidies and Grants - Official Credit Operations Yearly Balance...17 Table 12 Quantity of Issued Benefits Yearly Average...18 Table 13 National Treasury Expenditures - % GDP...18 Table 14 Social Security Primary Balance...19 Table 15 Quantity of Benefits Conceded of the General Regime...20 Table 16 Social Security Primary Balance - % GDP

4 Graphics List Graph 1 - Revenue, Expenditure and Central Government Primary Balance...6 Graph 2 - Central Government Primary Balance...6 Graph 3 - National Treasury Gross Revenue- Monthly Balance...9 Graph 4 - National Treasury Gross Revenue-Yearly Balance...10 Graph 5 - Grants - Calculation Basis...12 Graph 6 - National Treasury Expenditures Monthly Balance...15 Graph 7 - Current and Capital Expenditures- Monthly Balance...15 Graph 8 - National Treasury Expenditures- Yearly Balance...16 Graph 9 - Current and Capital Expenditures- Yearly Balance...16 Graph 10 - Outstanding Commitments...18 Graph 11 - Benefits Conceded by the General Regime

5 Central Government Primary Balance Central Government primary balance was a R$ 7.2 billion surplus in April 2013, compared to a R$ million surplus in March. The National Treasury recorded a surplus of R$ 13.7 billion while the Social Security System (RGPS) and the Central Bank recorded deficits of R$ 6.2 billion and R$ million respectively. Table 1 - Central Government Primary Balance 1 - Brazil / 2013 Description Mar/13 Apr/13 % Variation R$ Million % Variation I. TOTAL REVENUE , ,2 30,3% , ,3 4,9% National Treasury Revenues , ,7 38,1% , ,2 3,2% Social Security Revenues , ,9 11,5% , ,6 10,8% Central Bank Revenues 217,4 98,6-54,6% 904,4 913,5 1,0% II. TRANSFERS TO STATES AND MUNICIPALITIES , ,6 24,0% , ,3 3,0% III. TOTAL NET REVENUE (I-II) , ,6 31,5% , ,1 5,3% IV. TOTAL EXPENDITURE , ,0 21,2% , ,6 13,4% Treasury Expenditures , ,4 26,5% , ,9 12,5% Social Security Benefits , ,3 13,6% , ,2 14,8% Central Bank Expenditures 301,0 365,2 21,3% 1.025, ,4 16,7% V. SOVEREIGN WEALTH FUND - FSB 2 0,0 0,0-0,0 0,0 - VI. CENTRAL GOVERNMENT PRIMARY BALANCE (III - IV - V) 199, , , ,5-40,3% National Treasury 5.312, ,6 157,1% , ,0-20,5% Social Security (RGPS) , ,4 22,9% , ,6 36,9% Central Bank 3-83,6-266,6 219,1% -120,9-282,9 134,1% VI. PRIMARY BALANCE/GDP 3,24% 1,77% 1. Since 03/01/2012, it includes supplemental amounts of FGTS and its corresponding outlays, according to National Treasury Regulation 278, from 04/19/ In 2008 it corresponds to the expenses related to paid-in capital for the Fiscal Investment and Stabilization Fund (FFIE) from the SFB, as established by Law 11,887/2008, MP 452/2008 and Decree 6,713/2008. In 2012 it corresponds to the revenue from the redemption of quotas from the Fiscal Fund for Investment and Stabilization, according to CDFSB resolution 9/ Administrative expenditures net of own revenues (includes transfers from the National Treasury). Central Government primary balance was a R$ 7.2 billion surplus in April 2013, compared to a R$ million surplus in March Revenues of the Central Government recorded an increase of R$ 24.3 billion (30.3%), going from R$ 80.0 billion in March to R$ billion in April This behavior was determined mainly by the increases of R$ 10.4 billion (37.1%) in the collection of Taxes, of R$ 6.4 billion (92.1%) in other revenues and R$ 3.6 billion (15.1%) in contributions. Concerning expenses, there was an increase of R$ 14.3 billion (21.2%) when comparing April to March There was a rise of R$ 10.5 billion (26.5%) in treasury expenditures and of R$ 3.8 billion (13.6%) in Social Security benefits expenditures. 5

6 Graph 1. Revenue, Expenditure and Central Government Primary Balance Brazil / R$ Billion Graph 2. Central Government Primary Balance Brazil / R$ Billion 297,5 313,2 252,4 286,3 /12 /13 60,4 48,0 /12 /13 Primary surplus recorded a R$ 26.9 billion surplus in the first four months of ,1 26,9 Total Net Revenue Total Expenditure Primary Balance National Treasury -15,2-20,8 Social Security Primary surplus decreased R$ 18.2 billion (40.3%) in the first four months of 2013 compared to the same period of This behavior reflects the reduction of R$ 12.4 billion (20.5%) in the National Treasury surplus, an increase of R$ 5.6 billion (36.9%) in the Social Security deficit, and a reduction of R$ million (134.1%) in the Central Bank deficit. Central Government revenues recorded a growth of R$ 17.6 billion (4.9%) in the first four months of 2013 compared to the same period of This growth is mainly due to the increases in the collection of Taxes (increase of R$ 2.0 billion in Corporate income tax IRPJ and of R$ 2.0 billion in the collection of Withheld Income Tax - IRRF), in Contributions (increase of R$ 6.5 billion in Contribution to Social Security Financing Cofins), in Directly Collected Revenues (growth of R$ 1.1 billion. On the other hand, there was a reduction of R$ 4.0 billion in the collection of Dividends and of R$ 1.7 billion in the collection of the Contribution on Intervention in the Economic Domain (CIDE) Fuels. Grants to States and Municipalities recorded a growth of R$ 1.9 billion (3,0%) compared to the first four months of 2012, mainly due to the growth of R$ 1.8 billion (3.9%) in constitutional transfers and to the decrease of R$ million (92.3%) in grants related to the Contribution on Intervention in the Economic Domain (CIDE) Fuels. Compared to the first four months of 2012, Central Government expenses increased R$ 33.9 billion (13.4%) in This growth is mainly due to the rise of R$ 15.4 billion (16.6%) in Other Current and Capital expenditures and of R$ 14.5 billion (14.8%) in Social Security benefits expenditures. Table 2 -Central Government Primary Balance - Brazil / 2013 Description % GDP CENTRAL GOVERNMENT 3,24% 1,77% National Treasury 4,35% 3,16% Social Security -1,10% -1,37% Central Bank -0,01% -0,02% 6

7 National Treasury Revenues Table 3 - Central Government Primary Revenue 1 - Brazil / 2013 Description Mar/13 Apr/13 % Variation R$ Milion % Variation I. TOTAL REVENUE , ,2 30,3% , ,3 4,9% I.1. National Treasury Revenues , ,7 38,1% , ,2 3,2% Gross Revenue , ,0 34,6% , ,1 3,6% Taxes , ,1 37,1% , ,8 3,6% Income tax (IR) , ,3 49,3% , ,9 5,1% Industrialized Products Tax (IPI) 3.420, ,2 10,7% , ,5-7,1% Other 5.184, ,6 8,6% , ,3 4,6% Social Contributions , ,0 15,1% , ,4 8,8% Cofins , ,6 11,0% , ,8 12,1% CSLL , ,2 44,2% , ,2 3,8% Pis/Pasep , ,4 5,4% , ,2 11,0% CIDE-Fuels 0,8 0,9 8,7% 1.687,8 3,4-99,8% Others 1.987, ,9 4,1% 7.670, ,9 21,4% Others 6.946, ,0 92,1% , ,9-9,5% Financial Compensation Quotas 1.547, ,9 241,6% , ,8 2,0% Directly Collected 3.087, ,8 97,4% , ,2 7,7% Concessions 10,5 19,2 82,5% 384,0 322,4-16,1% Dividends 767,3 240,8-68,6% 5.041, ,2-80,0% Other 1.533, ,3 10,8% 6.859, ,3-18,2% (-) Restitutions ,3-539,2-72,1% , ,4 56,2% (-) Fiscal Incentives 0,0-46, ,3-51,6-62,5% I.2. Social Security Revenues , ,9 11,5% , ,6 10,8% Social Security Revenues - Urban , ,4 11,5% , ,1 10,9% Social Security Revenues - Rural 483,5 532,5 10,1% 1.737, ,5 6,0% I.3. Central Bank Revenues 217,4 98,6-54,6% 904,4 913,5 1,0% 1. Since 03/01/2012, it includes supplemental amounts of FGTS, according to National Treasury Regulation 278, from 04/19/ It excludes the employer share of federal civil service CPSS payments from revenues originating in contributions to the Social Security Plan (CPSS) and personnel outlays, with no impact on the consolidated primary balance. 3. Contribution to Social Security Financing. 4. Social Contribution on Net Corporate Profits. 5. Contribution to the Social Integration Program and Civil Service Asset Formation Program. 6. Source: Ministry of Social Security. Compilation of the RGPS result distributed by urban and rural clientele is made by the Ministry of Social Security according to a specific methodology. National Treasury Gross Revenue grew 34.6% compared to the previous month, particularly due to the increased collection of the Personal Income Tax - IRPF due to the payment of the first or the only installment (base year 2012). 7

8 National Treasury Revenues Monthly Balance compared to the previous Month National Treasury Gross Revenue increased R$ 20.4 billion (34.6%), going from R$ 59.1 billion in March 2013 to R$ 79.5 billion in April This behavior was determined mainly by the increases of R$ 10.4 billion (37.1%) in Taxes, of R$ 3.6 billion (15.1%) in Contributions and of R$ 6.4 billion (92.1%) in Other revenues. The collection of the Personal Income Tax - IRPF rose R$ 5.5 billion in April, when compared to March, due, particularly, to the collection of the first or the only installment related to the 2013 tax (base year 2012). In April, the collection of Taxes summed up to R$ 38.5 billion while Contributions added up to R$ 27.7 billion, increasing collectively R$ 14.0 billion (26.9%) when compared to March. This behavior reflects mainly the: i) increase of R$ 5.5 billion (540.9%) on Personal Income Tax IRPF due to payment of the first or only installment related to the 2013 tax statement (base year 2012); Graph 3. National Treasury Gross Revenue Brazil R$ Billion Taxes Social Contributions Other 6,9 13,3 24,1 28,1 27,7 38,5 Mar/13 Apr/13 ii) increase of R$ 3.0 billion (36.4%) and reduction of R$ 1.8 billion (44.2%) in the collection of Corporate Income Tax IRPJ and CSLL due to the collection of the first or the only installment of this tax referring to the quarterly collection and to the end of the legal period for payment of outstanding balance related to the 2012 tax statement, which both ended in March; ii) step up of R$ 1.5 billion (11.0%) in the collection of the Contribution to Social Security Financing Cofins; and Other Revenues of the National Treasury increased R$ 6.4 billion (92.1%), influenced by the following variations: i) rise of R$ 3.7 billion (241.6%) on Financial Compensation Quotas, due to the seasonal collection, in April, of special participation rights calculated quarterly; and ii) increase of R$ 3.0 billion (97.4%) in Directly Collected Revenues, due, specially, to the collection of R$ 2.5 billion regarding the payments of the TFF a fee on fiscalization of telecommunications services which integrates the Telecommunications Fiscalization Fund (Fistel). 8

9 National Treasury Revenues Accumulated Balance Compared to the Previous Year Compared to the first four months of 2012, National Treasury Gross Revenue rose R$ 10.0 billion (3.6%), going from R$ billion to R$ billion. This growth reflects the performance of the main macroeconomic indicators related to the collection of taxes, such as industrial production, sales of goods and services and overall wages as well as the impact of recent tax exemptions. The rise in tax collection and contributions are due, mainly, to the following factors: i) growth of R$ 6.5 billion (12.1%) on Cofins and of R$ 1.6 billion (11.0%) on PIS-Pasep, due, particularly, to the expansion of 4.1% in sales of goods and services between December 2012 and March 2013 (PMC-IBGE) and the increased collection in PIS/Cofins on exports; Graph 4. National Treasury Gross Revenue Brazil / R$ Billion Taxes Social Contributions Other 41,6 37,6 102,5 111,5 135,2 140,1 /12 /13 Compared the first four months of 2012, the National Treasury gross revenue rose R$ 10.0 billion (3.6%) in 2013, reflecting the performance of the main macroeconomic indicators related to the collection of taxes. ii) increase of R$ 2.0 billion (4.2%) in IRPJ and of R$ million (3.8%) on CSLL, explained mostly by the increase on the monthly estimated payments, especially from companies related to the financial sector; iii) growth of R$ 2.0 billion (22.1%) in Import Taxes, explained, mostly, due to the rise of 4.6% of the volume of import transactions in dollar; of 11.6% on the average exchange rate and of 3.8% of the average Import Tax; and Description Tabel 4 - Dividends - Brazil / 2013 iv) decrease of R$ 1.7 billion (99.8%) in the collection of the Contribution on Intervention in the Economic Domain (CIDE) Fuels. R$ Million Banco do Brasil 710,0 764,9 BNB 6,8 62,1 BNDES 3.500,0 0,0 Caixa 0,0 0,0 Correios 0,0 0,0 Eletrobras 0,0 0,0 IRB 0,0 0,0 Petrobras 673,7 0,0 Others 151,1 181,2 Total 5.041, ,2 Other Revenues reduced R$ 3.9 billion (9.5%) in the sum of the first four months of 2013 compared to same period of 2012 due specially to the reduction of R$ 4.0 billion (80.0%) in dividends. 9

10 Table 5 - National Treasury Gross Revenue - Brazil / 2013 Description % GDP GROSS REVENUE 20,09% 19,03% Taxes 9,73% 9,22% Income tax (IR) 7,15% 6,87% Industrialized Products Tax (IPI) 1,14% 0,97% Other 1,44% 1,37% Social Contributions 7,37% 7,34% Cofins 3,89% 3,98% CSLL 1,76% 1,67% PIS/PASEP 1,06% 1,07% CIDE-Fuels 0,12% 0,00% Others 0,55% 0,61% Others 2,99% 2,48% Financial Compensation Quotas 1,05% 0,98% Directly Collected 1,06% 1,04% Concessions 0,03% 0,02% Dividends 0,36% 0,07% Other 0,49% 0,37% 10

11 Grants to States and Municipalities R$ Million Table 6 - Grants to States and Municipalities - Brazil / 2013 Description Mar/13 Apr/13 % Variation % Variation TOTAL GRANTS , ,6 24,0% , ,3 3,0% Constitutional Grants 9.491, ,4 6,8% , ,0 3,9% Complementary Law 87/ Complementary Law ,0 650,0-650,0 650,0 0,0% CIDE Grants 0,0 55,6-740,1 57,3-92,3% Others 2.902, ,7 56,0% , ,0 5,0% Education-Salary 780,5 753,2-3,5% 3.122, ,7 14,1% Royalties (Law 9,478/1997) 1.425, ,2-24,5% 6.836, ,5 8,6% Fundef/Fundeb 2 682, ,9 292,1% 4.775, ,2-6,0% Others 17,3 21,4 23,7% 103,1 103,6 0,5% 1. Complementary Law 87/1996 (until 2003) and Financial Support to States resulting from Complementary Law 115/2002 (from 2003 to 2006). 2. Fund for the Maintenance and Development of the Basic Education. Grants to States and Municipalities increased R$ 3.0 billion (24.0%) in April 2013 compared to the previous month, due to seazonal factors. National Treasury Grants to State and Municipalities Monthly Balance compared to the previous Month In April 2013, grants to States and Municipalities increased R$ 3.0 billion (24.0%), and added up to R$ 15.4 billion, compared to R$ 12.4 billion in the previous month. This behavior reflects the: i) increase of R$ 2.0 billion (292,1%), in Fundeb related transfers, according to the transfer schedules determined by Interministerial Regulation 4/2013; and ii) step up of R$ billion (6.8%) in Constitutional Grants, compared to March, impacted by the collection of shared taxes (Income Tax IR and Industrialized Income Tax IPI). Third ten-day period First ten-day period Second ten-day period Graph 5. Grants - Calculation Basis Brazil R$ Billion 1,7 2,3 7,9 8,4 11,3 11,8 Mar/13 Apr/13 11

12 National Treasury Grants to State and Municipalities Accumulated Balance Compared to the Previous Year In the first four months of 2013, Grants to States and Municipalities rose R$ 1.9 billion (3.0%) compared to the same period of Compared to the first four months of 2012, grants grew R$ 1.9 billion (3.0%), going from R$ 62.7 billion in 2012 to R$ 65.5 billion in The main variations were: i) rise of R$ 1.8 billion (3.9%) in constitutional transfers (IPI, IR and others), due to the higher collection of shared taxes (IR and IPI); ii) increase of R$ million (8.6%) in royalties; and iii) decrease of R$ million (92.3%) in grants relating to the Contribution on Intervention in the Economic Domain (CIDE) Fuels. Table 7 - Grants to States and Municipalities - Brazil / 2013 Description Jan-Mar % GDP TOTAL Grants 4,51% 4,24% Constitutional Grants 3,34% 3,17% Complementary Law 87/ Complementary Law ,05% 0,04% CIDE Grants 0,05% 0,00% Others 1,07% 1,03% 1. Complementary Law 87/1996 (until 2003) and Financial Support to States resulting from Complementary Law 115/2002 (from 2003 to 2006). 12

13 National Treasury Expenditure Table 8 - Central Government Primary Expenditure 1 - Brazil / 2013 Description Mar/13 Apr/13 % Variation R$ Million % Variation I. TOTAL EXPENDITURE , ,0 21,2% , ,6 13,4% I.1. National Treasury Expenditures , ,4 26,5% , ,9 12,5% Payroll , ,7 21,6% , ,3 6,5% Current and Capital Expenditures , ,2 30,2% , ,9 16,6% Workers Support Fund (FAT) 2.598, ,9 24,3% 8.837, ,1 33,5% Economic Subsidies and Grants , ,6 38,6% 6.362, ,9-24,2% Assistance Benefits (LOAS/RMV) , ,7 26,9% 9.615, ,4 17,0% Petrobras Capitalization 0,0 0,0-0,0 0,0 - Other Current and Capital Expenditures , ,0 31,0% , ,6 18,2% Other Current Expenditures , ,3 29,2% , ,9 22,5% Other Capital Expenditures , ,7 36,1% , ,7 8,8% Transfers from Treasury to Central Bank 189,5 75,6-60,1% 720,1 647,7-10,1% I.2. Social Security Benefit , ,3 13,6% , ,2 14,8% Social Security Benefit - Urban , ,2 10,6% , ,8 14,6% Social Security Benefit - Rural 5.992, ,2 24,4% , ,5 15,6% I.3. Central Bank Expenditures 301,0 365,2 21,3% 1.025, ,4 16,7% 1. Since 03/01/2012, it includes outlays executed with FGTS supplemental amount resources, according to National Treasury Regulation 278, from 04/19/ It excludes the employer share of federal civil service CPSS payments from revenues originating in contributions to the Social Security Plan (CPSS) and personnel outlays, with no impact on the consolidated primary balance. 3. It includes outlays on grants to regional funds and, as of 2005, spending on the restructuring of liabilities. 4. Social Assistance Organic Act (LOAS) benefits and Lifelong Monthly Income (RMV) are assistance benefits paid by the Central Government. 5. It includes Housing Program (MCMV) expenditure. 6. Source: Ministry of Social Security. Compilation of the RGPS balance distributed by urban and rural clientele is made by the Ministry of Social Security according to a specific methodology. National Treasury Expenditure Monthly Balance compared to the previous Month In April 2013, National Treasury expenditures amounted to R$ 49.9 billion, which represents an increase of R$ 10.5 billion (26.5%) compared to March This is mainly due to the growth of R$ 7.4 billion (30.2%) in Current and Capital expenditures and to the reduction of R$ 3.2 billion (21.6%) in Payroll expenditures. The increase in Current and Capital expenditures is mainly due to the following factors: i) step up of R$ 5.6 billion (31.0%) in Other Current and Capital expenditures mostly explained by the increase of R$ 3.4 billion (159.2%) in the Growth Acceleration 13

14 Graph 6. National Treasury Expenditure Brazil R$ Billion Graph 7. Current and Capital Expenditure Brazil R$ Billion Current and Capital Expenditures Payroll 14,8 18,1 24,4 31,7 Mar/13 Apr/13 Others Current and Capital Expenditures Assistance Benefits (LOAS/RMV) Economic Subsidies and Grants Workers Support Fund (FAT) 2,4 3,1 1,3 1,8 2,6 3,2 18,1 23,7 Mar/13 Apr/13 PAC expenditures increased R$ 3.4 billion (159.2%) compared to the previous month. Program PAC. In April, there was also the compensation of R$ 1.9 billion to Social Security RGPS relating to the period from September to December This compensation stems from the reduction of payroll related contributions, according to Law 12,715/2012, and will follow the schedule stipulated in Interministerial Regulation 2 from March 28 th The Social Security tax exemptions will be published with a four month lag in order to improve the quality R$ Million Table 9 - Other Current and Capital Expenditures - Brazil and precision of the estimate; Description Mar/13 Apr/13 % Variation ii) increase of R$ billion (26.9%) in Assistance Benefits (LOAS/RMV); iii) rise of R$ million (24.3%) in the Workers Support Fund FAT. This payments observe the calendar for 2012/2013 (August 2012 to July 2013), regulated by Codefat Resolution 695/2012. Payroll expenditures amounted to R$ 3.2 billion (21.6%) in April compared to the previous month, particularly due to the increase of R$ 2.7 billion mainly due to payments enforced by payroll-related judicial remedies amounting to R$ 2.8 billion in April, against R$ million in March Judicial Sentences 52,0 86,8 66,8% Legislature 133,5 133,6 0,0% Judiciary 546,9 653,5 19,5% Extraordinary Credit 1 807,6 325,7-59,7% Growth Acceleration Program (PAC) , ,0 159,2% Others 3 128,3 369,8 188,3% Social Security Compensation 0, ,6 - Discretionary , ,9 2,7% Min. of Health 6.141, ,3 4,3% Min. of Social Devpt 2.235, ,1 15,9% Min. of Education 2.017, ,8 33,7% Min. of Defense 1.120, ,0-9,6% Min. of Sci & Tech 470,7 422,7-10,2% Min. of Agrarian Devpt 246,2 259,3 5,3% Min. of Justice 198,2 278,7 40,6% Min. of Social Security 168,2 170,1 1,2% Min. of Transportation 70,6 97,7 38,4% Min. of Cities 95,4 87,6-8,2% Others 1.496,3 618,5-58,7% Total , ,0 31,0% 1. It excludes extraordinary credit regarding Growth Acceleration Program. 2. It corresponds to PAC expenditure, which can be used to deduce the primary balance target. 3. It includes subventions, special legal benefits, transfers to the National Water Agency; Funds (FDA/FDNE), grants, grants to amnestied, agreements, compensations Proagro, Federal District Constitucional Fund, PNAFE and paid in capital expenses to international organizations. 4. Revenues transfered to the Social Security system - RGPS as compensation for the reduction of payroll related contributions, according to law 12,715/

15 National Treasury Expenditures Accumulated Balance compared to the previous Year In the first four months of 2013, the National Treasury Expenditure rose by R$ 19.3 billion (12.5%) compared to the same period of It is worth mentioning the rises of R$ 15.4 billion (16.6%) in Current and Capital Expenditures and of R$ 3.9 billion (6.5%) in Payroll expenditures. As a percentage of GDP, however, there was a decrease of 0.11 p.p in Payroll expenditures. Current and Capital Expenditures Graph 8. National Treasury Expenditure Brazil / R$ Billion Payroll 60,4 64,3 92,6 108,0 The growth of R$ 15.4 billion observed in Current and Capital Expenditures in the first quarter of 2013, when compared to the same period of 2012, can be explained by: i) growth of R$ 12.4 billion (18.2%) in Other Current and Capital Expenditures, mainly explained by the following variations: a) step up of R$ 6.2 billion (12.4%) in Discretionary expenses; b) increase of R$ 2.8 billion, (22.7%) in the Growth Acceleration Program PAC expenses; and c) rise of R$ 1.9 billion (306.4%) in outlays relating to Extraordinary Credits. In Discretionary Expenses, the main variations were the rise of R$ 2.0 billion (9.3%) in the Ministry of Health, of R$ 1.8 billion (23.9%) in the Ministry of Social Development and of R$ 1.0 billion (14.0%) in the Ministry of Education; /12 /13 Others Current and Capital Expenditures Assistance Benefits (LOAS/RMV) Economic Subsidies and Grants Workers Support Fund (FAT) Graph 9. Current and Capital Expenditure Brazil / R$ Billion 9,6 6,4 4,8 11,2 8,8 11,8 67,8 80,2 /12 /13 Table 10 - Other Current and Capital Expenditures - Brazil /2013 Description R$ Million % Variation Judicial Sentences 203,2 261,0 28,5% Legislature 448,5 462,9 3,2% Judiciary 2.115, ,7 7,0% Extraordinary Credit 1 620, ,6 306,4% Growth Acceleration Program (PAC) , ,6 22,7% Others ,9 974,8-43,3% Social Security Compensation 0, ,6 - Discretionary , ,3 12,4% Min. of Health , ,7 9,3% Min. of Social Devpt 7.647, ,9 23,9% Min. of Education 7.415, ,3 14,0% Min. of Defense 3.596, ,1-6,6% Min. of Sci & Tech 1.331, ,9 12,3% Min. of Agrarian Devpt 590,5 723,4 22,5% Min. of Justice 715, ,3 49,7% Min. of Social Security 676,8 734,9 8,6% Min. of Transportation 369,5 418,1 13,1% Min. of Cities 279,8 545,4 94,9% Others 5.590, ,3 9,3% Total , ,6 18,2% 1. It excludes extraordinary credit regarding Growth Acceleration Program. 2. It corresponds to PAC expenditure, which can be used to deduce the primary balance target. 3. It includes subventions, special legal benefits, transfers to the National Water Agency; Funds (FDA/FDNE), grants, grants to amnestied, agreements, compensations Proagro, Federal District Constitucional Fund, PNAFE and paid in capital expenses to international organization. 4. Revenues transfered to the Social Security system - RGPS as compensation for the reduction of payroll related contributions, according to law 12,715/2012 In the first four months of 2013, PAC expenditure increased R$ 2.8 billion (22.7%) compared to the same period of As a percentage of GDP the growth was 0.11 p.p. 15

16 Payroll Expenditures decresead 0.11 p.p., as a percentage of GDP in the first four months of 2013, compared to 2012, summing up to 4.23% in 2013 as opposed to 4.35% in ii) rise of R$ 3.0 billion (33.5%) in the Workers Support Fund FAT due primarily to the increase of 8.8% in the value of unemployment allowance and benefits according to Codefat Resolution 695/2012 and 707/2013; iii) increase of R$ 1.6 billion (17.0%) in Assistance Benefits (LOAS/RMV) from January through April compared to the same period of This variation is explained by the increase of 4.9% on the number of paid benefits as well as on the minimum wage growth of 14.1% and 8.8% in 2012 and 2013 respectively; and iv) reduction of R$ 1.5 billion (24.2%) in Table 11 - Economic Subsidies and Grants 1 Official Credit Operations - Brazil /2013 Description R$ Million Agricultural 4.122, ,0 Equalisation of Agricultural Extension 1.055,4 68,3 Equalisation of Rural and Agroindustrial Investments 67,7 144,0 Agricultural Price Policy 757,6 259,8 Harmonization of federal government loan 157,2 84,7 Harmonization of federal government procurement 450,4 55,1 Price maintenance guarantee 150,0 120,0 Pronaf 2.005, ,1 Pesa 107,9 421,9 Alcohol 0,7 0,0 Cocoa 0,4 0,0 Fundo da Terra/Incra 42,5 38,6 Funcafe 35,2 32,7 Revitaliza 50,5 4,6 Others 926,6 681,4 PSI 740,0 32,3 Op. Microcredit (EQMPO) 85,8 72,1 Op. Microcredit (EQPCD) 0,0 0,1 FND -20,7 0,0 FSA 0,0 250,0 Export (Proex) 28,2 183,0 Itaipu 2 93,3 143,8 Total 5.049, ,3 1. Does not Include outlays on grants to regional funds and spending on the restructuring of liabilities. 2. Refers to outlays on grants for Itaipu s electrical energy usage, following Legislative Decree Economic Subsidies and Grants, compared to the first quarter of 2012, adding up to R$ 4.8 billion. This is mainly due to the execution of the following programs: a) Equalization of agricultural extension (reduction of R$ million); b) Investment Maintenance Program PSI (reduction of R$ million); c) National Programme for the Strengthening of Family Farming Pronaf (reduction of R$ million); and d) Federal Government Procurement AGF (step down of R$ million). Payroll expenditures decreased 0.11 p.p as a percentage of GDP, going from 4.35% in the first four months of 2012 to 4.23% in the same period of In nominal terms, however, it recorded an increase of R$ 3.9 billion (6.5%), going from R$ 60.4 billion in 2012 to R$ 64.3 billion in There was an increase in payroll-related judicially determined payments of R$ million compared to the same period of the previous year. 16

17 Outlays regarding outstanding commitments in the first four months of 2013, following the principles established in the Financing and Budgeting Programming Decree, relating to current and capital expenditure, excluding PAC, totaled R$ 13.6 billion. Of the total outstanding commitments outlays, Health Ministry summed up to R$ 3.5 billion, Education Ministry summed up to R$ 3.4 billion and Defense Ministry summed up to R$ 1.5 billion. Graph 10. Outstanding Commitments Brazil / R$ Billion 0,9 13,3 32,9 Apr/12 Canceled Paid To pay 0,6 13,6 37,0 Apr/13 Total LOAS Table 12 - Quantity of Issued Benefits - LOAS - Brazil /2013 Variation compared to the previous year average Elderly Variation compared to the previous year average Persons With Disabilities R$ Million Variation compared to the previous year average Average ,0 7,8% ,3 9,5% ,8 6,3% Average ,0 9,1% ,3 9,7% ,8 8,6% Average ,3 8,6% ,1 9,4% ,2 7,9% Average ,3 7,8% ,0 6,5% ,3 9,1% Average ,7 6,6% ,3 4,7% ,3 8,3% Average ,7 5,0% ,8 3,6% ,9 6,3% Apr/ , , ,8 - Apr/ ,8 8,7% ,0 9,6% ,8 7,8% Apr/ ,3 9,4% ,3 10,0% ,0 8,9% Apr/ ,3 7,7% ,0 7,4% ,3 7,9% Apr/ ,3 7,1% ,5 5,2% ,8 9,0% Apr/ ,5 5,4% ,0 3,7% ,5 6,8% Apr/ ,3 4,9% ,5 3,7% ,8 5,9% Table 13 - National Treasury Expenditures - Brazil / 2013 Description Jan-Mar % GDP National Treasury Expenditures 11,06% 11,38% Payroll 4,35% 4,23% Current and Capital Expenditures 6,66% 7,11% Workers Support Fund (FAT) 0,64% 0,78% Economic Subsidies and Grants 1 0,46% 0,32% Assistance Benefits (LOAS/RMV) 0,69% 0,74% Others 4,88% 5,27% Transfers from Treasury to Central Bank 0,05% 0,04% 1. It includes outlays on grants to regional funds and, as of 2005, spending on the restructuring of liabilities. 17

18 Social Security Social Security recorded a deficit of R$ 6.2 billion in April 2013, as opposed to a R$ 5.0 billion deficit in March. Table 14 - Social Security Primary Balance - Brazil / 2013 Description Mar/13 Apr/13 % Variation R$ Million % Variation I. NET REVENUE , ,9 11,5% , ,0 8,4% Total Revenue , ,3 10,6% , ,8 8,7% Contributions deposited in banks , ,5 3,7% , ,0 6,1% Contributions from SIMPLES 2.298, ,0 3,0% 8.532, ,6 11,1% Revenue from FIES 12,7 20,5 61,0% 94,4 60,5-36,0% Judicial Payments 356,3 179,6-49,6% 658,9 875,1 32,8% Debt Rescheduling REFIS 6,9 8,1 17,5% 40,0 33,0-17,5% Social Security Compensation 1 0, ,6-0, ,6 - (-) Restitutions -38,5-66,4 72,4% -342,9-182,2-46,8% (-) Transfers to Third Parties , ,0 0,7% , ,6 12,9% II. SOCIAL SECURITY BENEFIT , ,3 13,6% , ,2 14,8% III. PRIMARY BALANCE , ,4 22,9% , ,2 49,5% IV. PRIMARY BALANCE/GDP -1,10% -1,50% Source: Ministry of Social Security 1. Revenues transfered to the Social Security system - RGPS as compensation for the reduction of payroll related contributions, according to law 12,715/2012. Social Security Monthly Balance compared to the previous Month In April 2013, Social Security recorded a deficit of R$ 6.2 billion, compared to a R$ 5.0 billion deficit in March. This behavior is mainly explained by the following reasons: i) increase of R$ 2.6 billion (11.5%) in Social Security net collection in April 2013 compared to the previous month, particularly due to the increase in revenues of R$ 1.9 billion as compensation for the reduction of payroll related contributions, according to Law 12,715/2012; and ii) step up of R$ 3.8 billion (13.6%) in Social Security benefits compared to March 2013 due to the payment of R$ 3.0 billion regarding the payment of judicial remedies in April compared to R$ in March. Social Security Accumulated Balance compared to the previous Year 18 Compared to the first four months of 2012, social security deficit increased from 1.10% to 1.37% of GDP in It corresponds to a step up of R$ 5.6 billion

19 (36.9%) in nominal terms. Social security net collection increased R$ 8.9 billion (10.8%), due to the growth in overall wages of 11.2% between December 2012 and March 2013 compared to the same period of the previous year, which impacts contributions on payroll. Social Security Expenditure rose by R$ 14.5 billion (14.8%) compared to the first four months of This behavior is mainly explained by the following Graph 11. Conceded Benefits of the General Regime Brazil / Average reasons: 26, ,00 i) a R$ (7.9%) rise on the average value of paid benefits, as a consequence of minimum wage increase as well as the rise of above-the-ceiling benefits; and 26,200 26,000 25,800 25,600 25,400 25,200 25,000 Quantity (Million) Average Value (R$) 834,13 25,373 26, ,90 900,00 880,00 860,00 840,00 820,00 ii) an increase of thousand (3.6%) on the monthly quantity of paid benefits. 24,800 Apr/12 Apr/13 800,00 Concerning benefit stock, compared to 2012, there were rises of 2.4 million retirements (3.6%), of thousand survivor pensions (2.5%) and thousand sickness benefits (5.0%). Description Table 15 - Social Security Primary Balance - Brazil / 2013 R$ Million % Variation % GDP NET REVENUE , ,6 10,8% 5,93% 6,00% Urban , ,1 10,9% 5,80% 5,88% Rural 1.737, ,5 6,0% 0,12% 0,12% BENEFITS , ,2 14,8% 7,02% 7,37% Urban , ,8 14,6% 5,44% 5,70% Rural , ,5 15,6% 1,58% 1,67% PRIMARY BALANCE , ,6 36,9% -1,10% -1,37% Urban 5.055, ,3-45,2% 0,36% 0,18% Rural , ,0 16,5% -1,46% -1,55% Source: Ministry of Social Security 19

20 Table 16 - Quantity of Conceded Benefits of the General Regime - Brazil / 2013 Description Mar/13 Apr/13 % Variation In Thousand Benefits % Variation GENERAL REGIME BENEFITS ,6% ,4% Social Security Contributory ,6% ,5% Retirements ,4% ,6% by Age ,4% ,1% by Invalidity ,2% ,7% by Length of Contribution ,4% ,0% Survivor Pension ,2% ,6% Sickness Benefits ,3% ,9% Maternity Benefit ,1% ,4% Others ,3% ,9% Labor Accident Insurance ,0% ,8% Retirement by Invalidity ,4% ,3% Survivor Pension ,1% ,4% Sickness Benefits ,3% ,2% Partial Invalidity ,2% ,3% Supplementary Benefit ,6% ,1% Source: Ministry of Social Security Note: Data subject to changes 20

21 Acronyms Fiscal Balance most usual Acronyms Caged General File of the Employed and Unemployed CIDE Contribution on Intervention in the Economic Domain Cofins Contribution to Social Security Financing CPMF Provisional Contribution on Financial Operations CPSS Contribution to Civil Service Social Security CSLL Social Contribution on Net Corporate Profits Emgea Assets Management Corporation FAT Workers Support Fund FGTS Severance Indemnity Fund for Employees Fistel Telecommunications Supervision Fund FND National Development Fund FPE State Revenue Sharing Fund FPM Municipal Revenue Sharing Fund FSB - Brazilian Sovereign Wealth Fund Fundeb Fund for the Maintenance and Development of the Basic Education ICMS Tax on the Circulation of Goods and Services IGP-DI General Price Index Internal Supply INSS National Social Security Institute IOF - Tax on Credit Operations, Exchange and Insurance IPI Industrialized Products Tax IRPF Personal Income Tax IRPJ Corporate Income Tax IRRF Withheld Income Tax LOAS Organic Social Assistance Law PAC Growth Acceleration Program Paes Tax Installment Payment Plan Pasep Program of Civil Service Asset Formation PESA Program of Financial Assets Rehabilitation PIS Social Integration Program POOC Program of Official Credit Operations Proex Export Financing Programme 21

22 Pronaf National programme for the strengthening of family farming PSH Subsidy programme for social interest housing PSI Investment Maintenance Program Refis Fiscal Recovery Program RFB Secretariat of the Federal Revenue of Brazil RGPS Social Security General Regime RMV Lifetime Monthly Income 22