With spending off the ceiling, debt will rise from 75% to 90% of GDP, says economist

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Public debt, which is expected to end 2022 below 75% of GDP, will climb to 90% by the end of Luiz Inácio Lula da Silva’s government, in 2026, if spending on Bolsa Família stays off the ceiling for this entire period , as claimed by the president-elect’s team in the Transition PEC.

The estimates are from the chief economist at AC Pastore & Associados, Paula Magalhães, who spoke this Wednesday (23) in an interview with CNN.

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“The proposal [da PEC da Transição]as presented, would leave BRL 200 billion [em gastos extra-teto] next year and then BRL 175 billion”, he said.

“This makes our debt/GDP ratio reach 90% in the last year of the Lula government. It is a very high value and very fast growth, if you take into account that this year it should end below 75%.”

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For the economist, the ideal is that, with the exception to the rule in 2023, from 2024 the financing of a larger Bolsa Família and other social programs are foreseen back under the roof, and with cuts in expenses in other fronts to that can be behaved.

This makes it possible to “reach a sustainable path for this debt”, according to Magalhães. “We are already paying very high interest rates, the Selic is at 13.75%, and the Central Bank will not be able to cut interest rates if there is fiscal lack of control.”

*Posted by Juliana Elias

Source: CNN Brasil

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