Brazilian President’s team is working to ‘restore’ public accounts
2023.01.02 11:30
Brazilian President’s team is working to ‘restore’ public accounts
Budrigannews.com – Fernando Haddad, Brazil’s new finance minister, said on Monday that his team is working to “restore” public accounts and will propose a new fiscal anchor in the first half of this year.
He said, “We are not here for adventures,” attempting to calm market anxiety regarding Lula’s return.
After Congress passed a package that increased Brazil’s spending cap to increase social expenditures, Haddad, a former mayor of Sao Paulo, took office with the challenge of presenting a credible fiscal framework.
In his first speech as president, Haddad stated that the government would work to reduce the “absurd” primary deficit forecast in this year’s budget of 220 billion real ($41.19 billion).
He said he would fight inflation and would send Congress a proposal for a new fiscal anchor that would try to make public debt sustainable in the first half of the year.
However, he did not mention Lula’s decision the day before to extend a costly fuel tax exemption, which some interpreted as a significant political setback for the new minister.
Haddad had made it clear before taking office that the measure, which costs 52.9 billion reais annually, would not be extended.
He told journalists after the event that Lula asked for an extension so that the new board of the state-owned oil company Petrobras could decide on resuming fuel taxes. The taxes make more money for the government but hurt Lula’s popularity.
Haddad, a lawyer with a master’s degree in economics, a doctorate in philosophy, and a master’s degree in law, has been viewed with suspicion by the market out of concern for excessive spending.
On Monday, he attempted to dispel these worries by stating that “certainly” fiscal and monetary policy harmonization would occur. Haddad stated that he will also endeavor to democratize credit access and establish a tax system that is more transparent.
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