Responses to the framework have been positive, but the government’s economic assumptions are seen as too optimistic
The new tax rule that will replace the spending ceiling was presented this Thursday (30.Mar.2023). The measure of the Minister of Finance, Fernando Haddad (PT), will guide the government to control public spending, while investors and financial institutions predictably monitor investment opportunities. Here’s the full of the project presentation (7.3 MB).
The proposal still needs to be approved by Congress. According to Haddad, the text is not yet ready and will only reach the Legislature after Easter, starting on April 10th. Even without its implementation, the fiscal framework is already causing reactions from market agents.
Stock Exchange:
The stock market’s immediate reaction on this 5th (March 30) was a 1.81% increase in the Ibovespa, the main index of the B3 (São Paulo Stock Exchange), which ended at 103,713 points. The result was the highest level in 20 days. The dollar, in turn, closed the day sold at R$5.098, down 0.73%, and the lowest value in 2 months.
Luiz Carlos Trabuco Cappi, Chairman of the Board of Directors of Bradesco:
“The proposal for a new fiscal framework presented by the Minister of Finance, Fernando Haddad, and by the Minister of Planning, Simone Tebet, is robust and was designed to add predictability, by guiding the government towards good management of public accounts”. read the full of the note (29 KB).
Isaac Sidney, president of February (Brazilian Federation of Banks):
“Febraban considers the set of measures announced by the economic team on the assumptions of the new fiscal framework to be positive, even anticipating the deadline established by constitutional amendment 126 (PEC da Transição). This is an important and meritorious step, as it seeks to combine the country’s social priorities with the necessary control of the expansion of public spending”. read the full of the note (61 KB).
“The Minister of Finance, Fernando Haddad, today presented Brazil’s new fiscal framework: the year-on-year increase in revenues and the achievement of the primary surplus target will serve to contain expenditure growth, in our opinion. However, the fiscal numbers presented suggest very optimistic economic assumptions and there are no details on triggers and exemptions”. read the full of the note (918 KB, in English).
abrainc (Brazilian Association of Real Estate Developers):
“The new rule can bring balance to public accounts in the long term and this is an essential condition for us to have low interest rates in a sustainable way and new investments, guaranteeing job creation”. read the full of the note (279 KB).
Matheus Pizzani, economist at CM Capital:
“The fiscal framework has shown that it seeks to correct distortions in patterns already adopted previously, especially with regard to the possibility of inserting the State into the economy, without giving up its commitment to restoring the country’s fiscal health, which is even more important if taken into account. account that it was designed to meet this objective both in the medium and long term”. read the full of the note (41 KB).
Rodrigo Simões, economist and professor at FAC-SP (Faculty of Commerce of São Paulo):
“Today, in this new rule, the situation has changed and it seems very credible to us, that it can give a little more quality in the management of public resources and in the issue of social demands, and can show us a more predictable trajectory and it is also understood that this rule shows that expenditure will have to chase revenue first”. read the full of the note (53 KB).
This report was produced by journalism intern Eric Napoli under the supervision of assistant editor Gabriel Máximo
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