In an interview with CNN this Friday (2), Otaviano Canuto, former vice president of the World Bank, assessed that the new fiscal rules, “which should be in force from 2024 onwards”, must be “credible” and that “do not change the fiscal perspectives medium and long term”.
“The challenge is to find a middle ground between commitments to keep Bolsa Família as it is, in a way that is legally compatible with the framework in force, and to propose a new framework that is credible and does not change the medium and long-term fiscal perspectives. to the point of messing with the interest rate charged by creditors,” he declared.
“The quality of the new fiscal framework to be proposed will matter a lot. Remembering that this new framework will require legal changes and, therefore, it is not credible that we will already have it in place next year. We are talking about something for 2024 onwards, and, in 2023, we will have what we have, which is the spending ceiling adjusted to cover the expenses with Bolsa Família.”
According to Canuto, it is this search for balance that will shape the perspective of the country’s interest rate.
“The Central Bank will have a margin to reduce interest rates when inflation drops, depending on the perception of the fiscal path. The monetary policy decision must also meet this, ”he said.
“The ball is with the definition of the new fiscal framework and a corresponding credibility.”
Check out the full interview in the video above.
Source: CNN Brasil
A journalist with over 7 years of experience in the news industry, currently working at World Stock Market as an author for the Entertainment section and also contributing to the Economics or finance section on a part-time basis. Has a passion for Entertainment and fashion topics, and has put in a lot of research and effort to provide accurate information to readers.
