09/21/2024 – 7:14
After overcoming successive currency crises, Brazil has faced challenges in its public finances over the past ten years, with repeated deficits and rising public debt, aggravated by previous economic policies. Today, the country is facing a crisis of confidence that is devaluing the real, scaring away investment, putting pressure on inflation and leading the country to have higher interest rates.
According to experts, the main causes that explain this chronic problem are: high spending on Social Security, high expenses with public servants, tax burden well above the average of other emerging countries and new pressures on items such as Continuous Benefit Payment (BPC) and health and education floors.
The economic team led by Fernando Haddad sought to recover revenues as a strategy to reduce the deficit. So far, the measures have been insufficient, and economists point to the urgent need for the government to establish an effective policy to reduce expenses – an agenda that is facing resistance from President Lula and the political wing of the government.
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