Any effort for the ceiling, even without effect, would be a sign of commitment, says Zeina

The doubts and uncertainties surrounding the vote on the Precatório PEC have impacted the decision of investors on the Brazilian Stock Exchange.

For economist Zeina Latif, if the government had made efforts to not have to relax the spending ceiling rule, even if the attempt was unsuccessful, it would already be a sign of commitment for the market.

“The fact of having made some effort would already be an important sign of commitment to public accounts. We wouldn’t have all this pressure on the dollar, as well as a worsening in the markets and, consequently, in inflation and interest rates”, added the economist.

The economist also says that the federal government should have prepared for the situation, as it had more efficient solutions for the transition from Bolsa Família to Auxílio Brasil.

“The government had to have prepared for this. There were more efficient ways to create Auxílio Brasil or a new aid other than Bolsa Família. To start with, the parliamentary amendments themselves, which we are talking about here at around R$ 15 billion. It would be a more efficient solution”, stated Latif.

The economist also stated that it would be important for the government to minimize the creation of new expenditure through compensatory measures.

“Always using that maxim: if you create a new expense, it would be important to minimize the effect with some kind of compensatory measure, even if it was not full”, he says.