The constitutional rule that limits government spending to the previous year’s inflation is largely responsible for the expectation of a surplus in the Union’s accounts for the first time in almost ten years, says economist Marcelo Cypriano, manager of Mont Capital Asset Management.
The spending cap turned seven years in 2022, if we count with 2016, the base year for the rule. “(The ceiling) changed the level and quality of discussion in the sector”. “Last year it almost did and this year the government should end up with a significant surplus in the accounts thanks to the spending ceiling”.
The logic behind the creation of the ceiling is to stabilize spending in real terms (discounting inflation), and the objective was successfully achieved, emphasizes the economist, since they have remained stable since 2016 (if inflation is discounted), for the first time since 50’s or 60’s, when public spending in Brazil was continuously growing faster than the economy.
“Today, for the first time, with this stabilization of spending, we managed to bring it below the collection, which had not happened since 2013”, he says.
See the full interview in the video.
*Posted by Ligia Tuon
Source: CNN Brasil
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