According to Samar Maziad, the rules point to revenue dependence and growth of Brazilian GDP in the coming years
NEW YORK – Vice president of Moody’s for sovereign risk, Samar Maziadevaluate that the proposal of the new tax framework of Brazil presented last week by government In Luiz Inácio Lula da Silva sounds “ambitious”, but its implementation is a challenge. In his view, the broad lines disclosed indicate a reliance on strong revenues and growth of the Gross Domestic Product (GDP) in Brazil in the coming years, both uncertain factors ahead, and the absence of a concrete way to reduce the country’s public debt.
“It’s good that there’s a proposition on the table now… I would say it looks ambitious and hinges on a relatively strong revenue performance and also, I think, a strong growth performance. [do PIB]”, evaluates Maziad, in an interview with Estadão / Broadcast.
Even if Brazil’s new fiscal framework is successful in its implementation, Maziad raises another caveat essential to fiscal credibility: time.
“You need implementation history to know if this framework works and as I said, [a proposta] it does not provide a trajectory of debt decline, but of stability,” he reiterated.
Moody’s vice president for sovereign risk also says the Lula government’s goal of running a primary surplus of 1% of Brazil’s GDP in 2026 appears to be “major progress,” but again, the ranking doesn’t predict the public accounts in blue neither this nor next year.
Source: Terra
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