SÃO PAULO, SP (FOLHAPRESS) – The social distance measures adopted in 2020 because of the pandemic had less impact on the São Paulo economy than in most of the country. While other states that also did well had the impetus of emergency aid or exports of basic products, São Paulo stood out for the good results of the financial sector and the services provided to companies by liberal professionals who quickly adapted to the home office. According to data from Seade (State System of Data Analysis Foundation), São Paulo’s GDP (Gross Domestic Product) grew 0.4% last year. The Brazilian economy shrank 4.1%. The state accounts for about a third of the national GDP. The financial sector alone made a contribution of 1.5 percentage points to the growth of the local economy. São Paulo represents 52% of the financial activities in the country. The sector has a weight of 10% in the state’s GDP. Professional, scientific and technical activities, which include law, accounting, marketing, research and engineering, among other services, contributed an additional 0.3 percentage points. The share of these services in São Paulo’s GDP is also almost 10%. They also made positive contributions, albeit minor, to trade, construction, real estate activities and information services. On the negative side, the falls in industry, transportation services (mainly passengers), accommodation and food, and private education and health stood out. “First, what worked in São Paulo was the gradual and organized reopening of all segments, with the signing of protocols with each sector. All of this gave confidence and the activity can resume with greater vigor, in addition to all the promotion work. investments that we made “, said the secretary of Finance and Planning of the state of São Paulo, Henrique Meirelles. “The expectation is that we will have greater growth in 2021 as well. Of course, this is very much related to the success of the vaccination program, which goes according to the schedule in São Paulo. In Brazil, it is a little more worrying.” According to data from Seade, the state concentrates the most modern tertiary sector in the country, with a strong presence of services provided to companies, such as financial, real estate and information and communication activities. In several other states, according to the institution, services aimed at families, which are more sensitive to the social distance measures necessary to combat the pandemic, are of greater importance. “The weak point of economic activity in the whole of Brazil in 2020 was the service sector, because of the measures of social distance. In São Paulo, the sector has grown. Those segments that are very concentrated in São Paulo are technology intensive and have changed the key to the home office quickly. They are also highly demanded by corporate headquarters and have a significant share in GDP “, says Vagner Bessa, manager of the Economic Indicators Area at Seade. The same logic explains the performance of São Paulo’s trade above the national average, according to Bessa. First of all, a good part of the companies managed to migrate to electronic commerce. In addition, the segment that suffered less from the crisis was the wholesaler, which represents almost 50% of São Paulo’s trade. “São Paulo is a national and international hub. Trade suffers, but the big wholesale and retail centers are here,” says Bessa. The Seade manager says that, although it has stood out in terms of growth, the state also sees a more uneven recovery in the economy, as in the rest of the country, given that most of the sectors that stood out employ less and have higher wages than those who were most affected by the crisis. Regarding the impact of emergency aid, he says that, in relation to other states, the effect of these resources on the economy is less. The volume, however, is important in absolute terms and has also helped to sustain consumption in the region. The state had already registered growth greater than the national average in 2019, respectively, 2.2% and 1.4%. For 2021, projections for Brazil are for expansion of just over 3%. For São Paulo, the state government projects growth of 5.4%. Seade reported that São Paulo’s GDP grew 0.5% in January and 1.1% in February, according to preliminary data. There is still no data for the GDP of the other states. An indicator that covers other regions is the Central Bank’s ICBR (Regional Economic Activity Index), which has results for 13 states. Although the numbers are comparable, since the methodology for calculating the BC index is not the same as for GDP, prepared by the IBGE, it is possible to analyze the difference between the states. In this case, Pará, Paraná and Pernambuco stand out with performances superior to those of São Paulo. Minas Gerais had results close to São Paulo (both with a drop of about 1%). At the opposite end, Rio Grande do Sul and Espírito Santo had declines above 4%. According to the BC Regional Bulletin released at the end of last month, Pará had a minor contraction in 2020 and was already above the pre-crisis level in December. The state is a major exporter of minerals and was favored by the increase in commodity prices and the exchange rate depreciation. Minas also benefited from ore sales, in addition to having good results in agricultural production. The Northeast is 0.7% below that observed in the pre-pandemic, but economic activity in Pernambuco has already recovered, with emphasis on the industrial sector. In particular, the segments of food, beverages, plastic packaging and cleaning products, those that benefited from the change in consumption caused by the pandemic. The BC highlights the contrast with the weak performance of the same sector in Bahia and Ceará. In Rio Grande do Sul, the most intense contraction is due, in particular, to the breakdown of the Rio Grande do Sul grain harvest, according to the BC bulletin. Espírito Santo was the state with the biggest drop in industrial production across the country, due to problems in the oil, metallurgy, services and agriculture sectors. INCREASING REVENUE While the federal government accounts are in the red for the seventh year in a row and some regional governments are going into insolvency, São Paulo is on the list of the ten states with the best financial situation, despite the high indebtedness. In 2020, with the help of the federal program approved by Congress, São Paulo accumulated a primary surplus of R $ 19.9 billion. In the previous year, when there was no such reinforcement, the result had already been positive by R $ 18.3 billion. There is at least 18 years of surplus. In the classification of the National Treasury, an organ of the Ministry of Economy, the São Paulo government has a score of B in terms of payment capacity, along with seven other states. Only two (Espírito Santo and Rondônia) are rated A. To reach the maximum score, São Paulo would need to evolve in the expense / revenue indicator and, mainly, reduce the high indebtedness. The state’s consolidated debt is the largest in absolute terms (R $ 312 billion). In relative terms, it is equivalent to 194% of revenue, close to the 200% limit set in the legislation, which earns you a C concept in this regard. The three states above this level (RJ, RS and MG) are classified as insolvent. The São Paulo government, however, has a high capacity to honor financial obligations, a very different situation from other large debtors, with an A concept in this regard. According to a report by the IFI (Independent Tax Institution), the debt problem affects a restricted group of states. “Only three considering that São Paulo, despite having a high debt, normally complies with its financial commitments.” São Paulo’s Secretary of Finance and Planning, Henrique Meirelles, says that indebtedness is within the prudential limits set by the Fiscal Responsibility Law, and that it is natural that the largest economy in the country and the state with the largest budget also have the largest debt in absolute terms. According to Meirelles, with the state and administrative social security reforms, the state was able to control expenses and keep accounts in the blue. Now, it needs to continue to grow in order to generate revenue, which will further improve fiscal indicators. “The situation in São Paulo is balanced because we have adopted the necessary measures to face the consequences of the pandemic. We carried out a social security reform, then the administrative reform, with the closing of companies, foundations, cuts in employee benefits and also tax benefits for companies” , he told the report. “Now, the big challenge is vaccination. With it, we will have the possibility of growth [da economia], with increased revenue. Expenses are already under control with the administrative reform. Now it is to vaccinate and bring in investments. “Last year, federal aid to São Paulo helped to stop the fall in revenues, which still shrunk, and contributed to a relief in the payment of the debt. Report by Ipea (Institute of Applied Economic Research ) that analyzed the 2020 data showed that all states closed last year in the blue, with a total positive result 27% higher, of R $ 65 billion. In the previous year, only Piauí had a deficit. According to the institute, the effects of economic recession resulting from the collection pandemic was more than offset by compensatory measures, leading to an increase of R $ 16 billion in revenue and a virtual stability of expenditure, considering federal transfers, suspension of debt payments to the Union and freezing of funds. In São Paulo, despite the federal aid, net current revenue shrank 1.5% in 2020 (national average, there was growth of 2.4%). According to Meirelles, the state does not it needs further assistance in 2021, although it can support the plea of other governors who are in dire straits because of the pandemic. The secretary also affirmed that he has resources to handle the necessary public investments. In 2020, investments grew by 5%, with a share of around 20% in the total applied by all states, according to data from Ipea. He also points out that the state is counting on the advancement of the concession and privatization plan. Currently, the state is the second with the largest number of state-owned companies. There are 20 companies, one less than the Federal District. Six of them are dependent. With the adjustments made in recent years, the state has managed to reduce spending. In the expense / revenue ratio, São Paulo received a B score from the Treasury in 2019 and is among the 12 best results. It was the only Brazilian state with a real drop (discounting inflation) of gross personnel expenses in the period 2011-2019, of 9%, a period in which the median was an increase of 32%. In 2020, it dropped another 2%. He is one of five who would be able to respect the “alert limit” of the Fiscal Responsibility Law (54% of this revenue). It is 52.9%. It is below average in spending on assets (37% compared to 46%), with the second lowest in the country in comparison with revenues, behind only Espírio Santo. But it is above the inactive (16%, among the eight largest in the country in terms of revenue), in which the retired police and the Judiciary weigh. The latter has a participation that is twice the average of all states and is above the alert level of the LRF (5.5% of net revenue to a limit of 5.4%), according to the TCE (Tribunal de Contas do State).
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