Credibility of promising fiscal rule for a few years is zero, says economist

Credibility of promising fiscal rule for a few years is zero, says economist

In an interview with CNN , this Friday (18), economist Alexandre Schwartsman stated that the credibility of promising a new fiscal rule “for a few years from now is zero”. The economics specialist CNN commented on the speeches of the elected vice-president, Geraldo Alckmin (PSB), when he said that the future government of Luiz Inácio Lula da Silva (PT) is working on a new fiscal anchor model.

“Every time the fiscal anchor collided with the government’s need to increase spending, who won? What is the guarantee that this business will not be changed in the future if necessary? Credibility of promising a fiscal anchor for a few years from now, for me, is zero. If the market is the least bit smart, it will attribute zero credibility too, because that is our story”.

For Schwartsman, although Lula hinted that there should be fiscal responsibility in his future government, what is concrete is a deficit that will be much greater than expected.

“As much as he [Lula] make these promises, concretely, there is a proposal to increase expenses much more than they were carried out this year. Which means that, looking forward, it’s going to have a much larger deficit than what was being projected,” he said.

*Watch the full interview in the video above.

*Published by Pedro Zanatta, from CNN Brasil Business.

Source: CNN Brasil