Looking at public debt is fundamental for fiscal rules, says economist

In an interview with CNN this Monday (14), the economist at Asa Investimentos Jefferson Bittencourt stated that observing the public debt is essential for planning new fiscal rules.

“Looking at the debt is fundamental. Fiscal rules are designed to generate or induce fiscal responsibility, and fiscal responsibility aims to keep debt at sustainable levels. If these rules are not focused on the debt, we run the risk of not achieving what is effectively their objective, which is this control of the public finance situation,” he said.

The economist commented on the fiscal anchor proposal presented by Treasury officials this Monday. The disclosed fiscal anchor proposal aims to replace three rules currently in force with just one, which limits the real growth of federal government spending to the trajectory of net debt.

For Bittencourt, another important point is to observe the magnitude involved in spending outside the ceiling proposed by the transition team in the Transition PEC.

“A very high expenditure – outside the ceiling – tends to compromise the debt trajectory… The magnitudes involved and the nature of the expenses involved tend to compromise the future design of the new rules and the very discussion of the sustainability of the accounts [públicas]🇧🇷

Watch the full interview in the video above.

*Published by Pedro Zanatta, from CNN Brasil Business.