The government sent on Monday (23rd) to the Joint Budget Committee the revision of the macroeconomic parameters of the proposed budget for 2010. The growth of Gross Domestic Product (GDP) was raised by 0.5 percentage point - from the 4.5%, predicted in the plan submitted in August, to 5%. The forecast for the current year (1%) was maintained.

The variation of the GDP is an important budget indicator because of its effect on federal revenues. The document submitted by the government has other numbers that also affect revenue. For the wage bill - which is directly related to the collection of funding for social security - a nominal increase of 10.41% was projected in 2010. The figure is somewhat lower than the first prediction (10.49%).

Inflation
According to the official inflation index (IPCA) inflation was estimated at 4.42% for next year - the initial estimate was 4.33%. The Selic rate (the Brazilian prime rate) showed increase in the review – rising from 8.71% to 9.18%. The exchange rate showed a significant fall, reflecting the trend of appreciation of the real. The initial projection was for an average rate of R$ 2.01 to the dollar in 2010. The revision reduced the value to $ 1.72, a difference of 14%.

The Budget Guidelines Law (LDO) requires that the Executive branch review the official projections for the major macroeconomic variables of the planned budget. The goal is to provide a greater degree of realism to the proposal when it passes through Congress. The figures that appeared in the original text referred to projections made in July.

These numbers should now be worked up by the rapporteur on the revenue, Senator Romero Juca (PMDB-RR), who will present in December a report on the federal revenue review for 2010.

Reporting - Janary Junior
Edition - Newton Araújo
Translation – Rejane Xavier