Brazil’s Congress passes 2022 budget guidelines law

RIO DE JANEIRO, BRAZIL – The Budget Guidelines Law, which establishes the goals and priorities for next year’s public spending, was passed in a joint session of the Chamber of Deputies and the Senate, and will enable president Jair Bolsonaro’s government to prepare the final budget for 2022, which must be submitted to Congress by August 31.

Among other points, the bill provides for a large increase in resources for financing election campaigns in 2022 when federal and state elections will be held in Brazil, sparking criticism among opposition deputies and senators.

The resources for the so-called electoral fund almost tripled with respect to 2020, from R$2 billion (US$391 million) to R$5.7 billion.

In the draft passed on Thursday, the bill’s rapporteur, Juscelino Filho, also maintained the Brazilian government’s estimates for the country’s economy, although he considered “conservative macroeconomic parameters” given the “expectation of a heated economy.”

For 2022, Bolsonaro’s economic team estimates 2.5% growth in Gross Domestic Product (GDP), inflation at 3.5% and an average basic interest rate of 4.7% per year.

For the minimum wage, the bill provides for a readjustment in line with the inflation rate, from the current R$1,100 to R$1,147.

However, the draft foresees a deficit of R$170.4 billion in the government’s public accounts, which would represent 1.9% of GDP.

The guidelines, which now depend on the president’s sanction or veto, stress that the government should prioritize the National Immunization Program, the early childhood agenda, low-income housing programs and the expansion of the cancer care network infrastructure.

The Budget Guidelines Law was passed on Thursday morning by the Joint Budget Committee and was ratified last night by the full Congress.