Brazil - Public Expenditure Growth
The chart below shows the growth rate above inflation of federal
government spending, calculated by the sum of 12 months divided by 12 months
immediately prior. It does not include the expenses of the states and
municipalities.
The average rate of growth of public spending was approximately 5% above
inflation between 1998 and 2016. The Social Security benefits spending grew about 6%
above inflation over the same period.
The expenditure growth was only possible because there was also growth
in revenues in the period, related to the expansion of GDP and rising
international commodity prices.
However, from 2014, expenses kept the growth trend, while the stagnation
of the economy has reduced expenditure growth, resulting in the rise in public
debt.
Note that the Social Security benefits have structural feature, and the
trend is growing maintenance above inflation, considering the current rules.
Benefits of Social Security is now the equivalent of about 40% of total
expenditure, and the trend is of explosive growth without reform of its rules.
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| Source: Brazilian Treasury |
