Expectations for the appointment of finance minister double with Lula’s return

Last week was marked by ups and downs.

If, on the one hand, the speeches last Wednesday (16) by president-elect Luiz Inácio Lula da Silva (PT) on the environmental agenda were praised at COP27, on Thursday the questions about fiscal responsibility scared economists.

The outcome of the week, however, calmed things down: Guido Mantega, former Minister of Finance under Lula and Dilma Rousseff, left the government’s transition group, and the president-elect said he would accept advice “if they are good”, in reference to the letter written by Pedro Malan, Arminio Fraga and Edmar Bacha. In it, the economists said they shared Lula’s concern with poverty, but defended that the challenge is to take measures that do not create bigger problems than those that want to be solved.

With Lula back in Brazil, the week begins with the expectation that the name of the new finance minister will be announced, which could reduce the level of uncertainty. But, depending on who is appointed to command the economy and the next steps of the PEC do Explosion, pessimism may increase.

Concretely, what we have so far are promises of more spending, although there are still no details on how the bill will be paid and where the new tax rules will stand.

In response, alerts to the lack of control of public accounts have been multiplying. The Independent Fiscal Institution (Ifi), a body linked to the Federal Senate, shows that the current situation points to an increase in the country’s indebtedness and public accounts in the negative until 2031.

In this Monday’s episode (21), CNN Money will deal with expectations for the transition of the Lula government in the economy, as well as what to expect from the week that begins.

Presented by Thais Herédia and Priscila Yazbek, CNN Money presents an overview of news topics that influence markets, finances and the direction of society and power dynamics in Brazil and the world.

*Posted by Tamara Nassif