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States that control spending have better economic and social results

Fiscal adjustment

Study shows that balance of accounts makes states with GDP five times lower than others in investment with own resources

The Brazilian states that, in the last decade, have been concerned with reducing compulsory expenditures - especially with pensions and personnel - now have investment capacity and social indicators higher than those of states that have left aside.

Study published this Friday (21/06)  by the Special Secretariat of Finance of the Ministry of Economy demonstrates these two different realities. The farm has compared the sum of investments made over the past years by two groups of federative entities - the first with more balanced finances and the other with expenses permanently growing more than revenues.

States such as Alagoas, Ceará and Espírito Santo - which sought to balance the accounts in the period - had in 2018 investment capacity higher than they had in 2012: around R $ 5 billion added. Others, such as Rio de Janeiro, Minas Gerais and Rio Grande do Sul - which increased their spending - saw investment capacity plummet in the same period, falling from approximately R $ 14 billion in 2012 to R $ 4.5 billion in 2018.

"In 2018, the sum of the investments made by Rio de Janeiro, Minas Gerais and Rio de Janeiro was already lower than that of the other three states that did the homework," analyzes the Director of Programs of the Secretariat of Finance Bruno Funchal . According to him, the numbers draw even more attention because the Gross Domestic Product (GDP) of Ceará, Espírito Santo and Alagoas is five times smaller than that of the entities compared. "Even in smaller states, they have a greater capacity to invest, in absolute terms, than other large entities," he says.

Funchal points out that these states have begun to face the problem ahead even before the Union, so today they are in situations more favorable than the Federal Government. "The federal government's investment capacity has been flattened by the mandatory spending in recent years. New Social Security comes to fix this problem, "he says.

Social indicators

The Finance Department emphasizes in the study that the fiscal balance allows the continuity of basic services of greater relevance to the most needy population, besides ensuring better planning and execution of public policies, resulting in growth.

As an example, the document shows that, in 2018, Ceará, Espírito Santo and Alagoas grew 3.9%, 2.4% and 1.58%, respectively, all above the national average.

The study also evaluated the evolution of indicators of educational level in all Brazilian federal entities. According to the material, states where spending on personnel is high have worse indicators than others.

"The evolution of the Basic Education Development Index (Ideb), between 2013 and 2017, is positive among the states that have sought to adjust spending. Espírito Santo, Ceará and Alagoas, for example, rose between six and nine positions in the ranking ", compares Bruno Funchal, reporting that the states of the other group fell between six and 12 positions in the same period.