It’s not time to readjust civil servants’ salaries, says economist

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President Jair Bolsonaro said that he intends to readjust the salaries of the civil servants, if the PEC dos Precatório is approved.

The plan, however, comes at the wrong time, argues Gabriel Barros, partner and chief economist at RPS Capital.

“This is not the time to do this. It is not appropriate to use this space opened by the PEC of more than R$110 billion to readjust civil servants’ salaries. Just as it is not correct to use this fiscal space for Congress to capture the budget through rapporteur amendments, electoral fund and a series of other decisions”, he said.

“This decision is not going in the direction the country needs right now. Servers have stability. This, in a moment of crisis, is something very valuable, especially as 14 million unemployed people try to find a place in the market. Private sector workers are more susceptible to shocks in the economy.”

increasing risk

The economist also warns of the growing fiscal risk in the country. “Especially considering that the government had alternatives to finance Brazil Aid that do not involve breaking the spending ceiling,” he said.

The hole in the ceiling and the liabilities created with the postponement of payment of court orders, he explains, bring instability, disorganize the economy, above all, through the exchange rate channel, which contaminates inflation and forces interest rates up. “A part of the rising prices is imported, but another relevant part is the result of this debate”, he says.

“Expenditures may increase going forward. There are alternatives to this PEC of the Precatório to reinforce the social program. There is the exit of extraordinary credit, for example. It is worth remembering that the STF decided earlier this year that the government needs to create the basic income for citizenship. This court decision plus the endorsement of the technical area, which is the TCU, provide support for this”.

Watch the full interview in the video above.

* Posted by Ligia Tuon

Reference: CNN Brasil

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