The federal government has declared a state of public calamity due to the coronavirus.
Jair Bolsonaro will request that the National Congress recognize a state of public calamity in the country until December 31st.
BRASILIA (Reuters) The government announced on Tuesday that it will ask Congress to recognize a state of public health emergency due to the coronavirus pandemic and its impacts on the health of Brazilians and the country's economy, opening up space to increase its spending.
"Due to the ongoing monitoring of the Covid-19 pandemic, the need to increase public spending to protect the health and jobs of Brazilians, and the prospect of a drop in revenue, the Federal Government will request that the National Congress recognize a State of Public Calamity," states a note from the Special Secretariat for Social Communication of the Presidency of the Republic.
According to the statement, the measure will be in effect until December 31 of this year.
The note explains that the recognition of a state of public calamity exempts the Union from meeting the fiscal target set in the Budget Guidelines Law (LDO) for this year, which is a primary deficit of 124,1 billion reais for the central government (Treasury, Social Security, INSS), and consequently, from the spending limits stipulated in the Fiscal Responsibility Law. In practice, this gives the government leeway to spend more.
The text further reaffirms the government's commitment to "the structural reforms necessary for the transformation of the Brazilian State, for maintaining the spending cap as an anchor of a fiscal regime that ensures confidence and investments for the recovery of our sustainable growth dynamics."
Reporting by Lisandra Paraguassu