In an interview with CNN Carlos Braga, former director of the World Bank, said he does not see a conflict between fiscal responsibility and social responsibility with regard to the Transition PEC.
“In reality, the best way to address Brazil’s social problems is through economic growth, with increased productivity and expansion of the labor market,” he told the CNN New Day this Wednesday (16).
” If we do not take care of the fiscal area in a proportional way, we will have an increase in inflation, the most aggressive ‘tax’ that exists and that affects mainly the poorest layers. In this context, it is very important to have a message in terms of how the country’s fiscal developments will be handled going forward, whether temporary or prolonged, as handled in the past.”
According to Braga, the fiscal path that the government seems to follow could increase public spending by around 2% of GDP, bringing consequences on how the “BC will work its monetary policy to avoid inflation”.
*Posted by Tamara Nassif
Source: CNN Brasil
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