President of the Senate states that “going against the direction” of the Finance Minister’s directives would put the country on a “dangerous path”
The President of the Senate, Rodrigo Pacheco (PSD-MG), defended this Monday (30.Oct.2023) “follow guidance and guidelines” of the Minister of Finance, Fernando Haddad. Without mentioning the minister’s objective of eliminating the fiscal deficit in the public budget in 2024, the congressman stated that Congress will seek to contribute to the “fulfillment of the established goal”.
“Going against this would put the country on a dangerous path”declared Pacheco in a statement sent to the press.
Pacheco’s statement was made after the president Luiz Inácio Lula da Silva (PT) said, on Friday (Oct 27), that the government “difficultly” will meet the target of zero fiscal deficit. The PT member also stated that the financial market is “greedy” and who doesn’t want to start the year by cutting “billion” of priority works and investments.
Read the full note released by Senator Rodrigo Pacheco this Monday:
“We must follow the guidance and directives of the Minister of Finance, who is entrusted with the important mission of establishing Brazil’s economic policy. Going against this would put the country on a dangerous path. Parliament has this understanding and will seek to contribute with the necessary approvals, with good initiatives and pursuing the achievement of the established goal.”
Zero deficit target
The government could present a hole of up to R$28.6 billion in the primary result in 2024 to meet the fiscal target. A IFI (Independent Fiscal Institution of the Senate) calculated the possible margin of maneuver in next year’s Budget due to the new fiscal rule.
The estimate is in a report by the entity on the evolution of the Brazilian fiscal framework. Here’s the complete of the document (PDF — 2 MB).
The mechanism that replaces the spending ceiling defines a tolerance interval of 0.25 percentage points of GDP (Gross Domestic Product) for the primary balance annually. For 2024, the government has set a target of zero deficit.
The primary balance is formed by subtracting revenues from expenses, without counting debt interest expenses. With the sanction of Complementary Law 200/2023which established the new fiscal framework, there was a change in the Fiscal Responsibility Law.
The change establishes that the annex of fiscal targets of the project of the LDO (Budget Guidelines Law) must contain tolerance intervals of 0.25 pp. For next year, the text estimates that GDP will be R$ 11.5 trillion in nominal terms.
Deputies and senators have around 8 weeks until the end of 2023 to vote on proposals related to the 2024 Budget and priority projects for the government with the aim of increasing revenue next year. Read more here.
#Pacheco #defends #Haddad #Congress #contribute #goal