SAO PAULO (Reuters) – Brazil’s Finance Minister, Fernando Haddad, acknowledged concerns about the country’s finances in a recent interview, promising to limit spending to improve the situation.
WHY IT’S IMPORTANT
The Brazilian government is looking for new revenue sources to eliminate its fiscal deficit. However, many doubt its ability to achieve this due to its reluctance to implement significant spending cuts.
BACKGROUND
Brazil aims for a zero fiscal deficit this year, allowing a slight margin of 0.25% of GDP as per a fiscal plan established last year.
KEY QUOTES
“The fiscal framework won’t work without limiting spending,” Haddad told Folha de S.Paulo. He noted concerns regarding future spending that could impact debt.
Haddad also mentioned that high public debt rates (6.5-7%) are problematic and that a fiscal adjustment is necessary for long-term stability.
He emphasized that revenues should be around 19% of GDP while expenses should be lower for Brazil to achieve a fiscal surplus, stabilize debt, and encourage the central bank to lower interest rates.
