Treasury increases limits for investment in 9 States
Valor Econômico
The increase of the limits of indebtedness of nine States of the country represents a total amount of R$ 6.65 billion (US$ 3.5 billion) in new financings which will be used in investments in infrastructure works and in the social area. The National Treasury has already approved the reviews of the Fiscal Adjustment Plans (PAF) for the States of Amazonas, Ceará, Mato Grosso, Pará, Piauí, São Paulo, Mato Grosso do Sul, Roraima and the Federal District this year. The stock of the debt in these States, which was R$ 13.99 billion (US$ 7.4 billion), went up to R$ 20.64 billion (US$ 10.9 billion).
The reviews of the adjustment plans to increase the limits of indebtedness and, with this, finance investments depend upon the index reduction that shows the ratio between consolidated net debt and the current net revenues of the State. In the case of São Paulo, the Treasury informed that, in December 2002, the index was 2.27. In December 2005, it went down to 1.97. The most recent index, from April 2009, it had already fallen to 1.48.
The debt of São Paulo, in December 2002, amounted to R$ 90.21 billion (US$ 31.3 billion), for a revenue of R$ 39.67 billion (US$ 13.7 billion). In April this year, it increased to R$ 124.34 billion (US$ 65.4 billion) and the revenue increased to R$ 84.25 billion (US$ 44.3 billion). The Resolution No 40 issued by the Senate in 2001 determines that the maximum index of the ratio between the consolidated net debt and the current net revenue is 2.0 for the States. This means the debt, after 15 years from the publishing of the resolution, cannot exceed two times the revenues. São Paulo is the State that showed the biggest volume of new credit operations in the review of the PAF. In relation to the previous adjustment plan, the debt increased R$ 1.3 billion (US$ 684.2 million).