The Finance Minister says the proposals reflect consensus between the executive and legislature and that it would make no sense to wait until March to send a “more robust” project to rebalance public finances
BRASILIA – The Minister of Finance, Fernando Haddaddeclared on the morning of this Friday the 20th, that the spending cuts package sent to Congress This is the “first wave” of fiscal adjustment measures. He stated that the changes made by Congress will have a negative impact of approximately R$1 billion over two years, compared to the savings of R$71.9 billion initially expected by the ministry.
According to Haddad, the package is the result of a consensus that currently exists between the executive and legislative branches and, in his opinion, it would not make sense to wait for other measures to mature internally before being able to send something more robust to Congress.
“We are approaching the end of the year. Either I would send the document now to approve a first wave of adjustments or I would leave a more robust package for next year, which would generate more uncertainty, not less. I have no intention of sending it now why isn’t it robust enough? It would be a cold shower, it would be the opposite of what people say,” he said during a breakfast with journalists.
According to him, the possibility of waiting until March to develop other ideas and present them all together could have a worse effect on the expectations of economic operators.
“It is better to submit to the National Congress something that, in some way, is pacified between the Executive, the ministries, between the Legislature itself, the deputies and senators of the base, rather than waiting until March to have something more robust, more flashy”, he said.
According to him, the Ministry of Finance has already recalculated the impact of the changes made by Congress to the two bills and the Proposed Constitutional Amendment (PEC) of the package. According to him, the effect will be a loss of R$ 1 billion in two years.
“The bill has already been drawn up. It has not yet been published because it is being approved by the Senate. But we estimate something around R$ billion (of losses) in two years,” he said.
Haddad received journalists for breakfast this Friday. When asked about the effects of the increase Selic that it could have on the level of activity in the coming months, he ruled out that the government could implement some kind of parafiscal stimulus, but said that there is already an expectation of a slowdown, based on projections from the Ministry of Finance.
“I do not intend to implement any fiscal stimulus policy, it is not in our order of consideration. I believe that this cycle of increasing interest rates will have a very rapid effect on the economy. Our growth projection for next year is 2, 5%, it’s in the budget, it’s already 1 point below this year. The slowdown has already been more or less contracted by the government itself,” he said.
Source: Terra
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