The Independent Fiscal Institution (IFI) evaluates that the text of the PEC of the Explosion approved by the Senate is better than the previous version, as it keeps most of the primary expenditures under the ceiling, but that little changes the fiscal scenario projected by the institution, of deficits persistent primary and gross debt of 95.3% of GDP in 2031.
The analysis was carried out by the IFI in its Fiscal Monitoring Report for the month of December, released on Wednesday (14).
According to the institution, the PEC approved by the Senate little changes the scenario due to three factors. First, due to the space for expanding expenses, which remains high (R$ 169.1 billion).
Second, on account of the fact that most of it should be allocated to expenses that will not be limited to 2023, such as the increase in the Brazil Aid and the recomposition of budget programs. And for enabling the implementation of campaign commitments, but not showing how this relates to the sustainability of the accounts in the medium term.
The institution assesses that the current context should impose caution, since the restrictive effects of monetary policy and the moderation of growth in the global economy continue to indicate a slowdown in the domestic economy in 2023.
“Combined with lower inflation, they will prevent the maintenance of the tax collection growth pace and the central government – which should end 2022 with a primary surplus of 0.7% of GDP (R$ 68.6 billion) – will again register a deficit in the year next year, around 0.8% of GDP (R$ 88.6 billion)”, says the document.
In addition, the IFI projects that the general government’s gross debt should reach 74.5% of GDP, accumulating a drop of 3.8 pp of GDP in 2022. However, to stabilize it, the consolidated public sector should register a surplus of 2.4% of GDP in 2023, far from the current deficit projection of 0.8% of GDP.
Finally, the institute reiterates the need for a new fiscal framework. “In this regard, the PEC approved in the Senate provides for the submission, by the President of the Republic, by August 31, 2023, of a complementary bill that establishes a ‘sustainable fiscal regime’, a proposal that will possibly divide Congress’s attention with tax reform”.
Source: CNN Brasil
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