After S&P’s decision, Haddad says that the fiscal framework is a guarantee of spending control

The Minister of Finance, Fernando Haddad, celebrated this Tuesday (19) the increase in Brazil’s credit rating by the risk rating agency S&P. Haddad stated that the new fiscal framework is the government’s guarantee for spending control and pointed out that agencies notice when there is harmony between the Powers around a greater objective for the country.

“It was the last agency to review Brazil’s rating, Moody’s and Fitch had already reviewed it, in the middle of the year. I think S&P was waiting for Congress to finalize the reforms. This harmony between the Powers, to put order in the accounts, guarantee budget and social programs, when the country has a project, the agencies realize that there is coordination around a greater objective”, said the minister.

The minister praised the performance of the presidents of the Chamber, Arthur Lira (PP-AL), and of the Senate, Rodrigo Pacheco (PSD-MG), in the processing of economic agendas. Haddad stated that Brazil must have an investment grade. S&P raised the credit rating from BB- to BB, classified as a stable outlook for the economy. To reach investment grade, Brazil needs to move up two positions in the S&P ranking, that is, to BBB-.

“I’ve never been satisfied with the fact that Brazil doesn’t have investment grade. Because a country that doesn’t owe a penny in hard currency, that has more than US$300 billion in cash, can’t not have investment grade. It has to have investment grade “, he highlighted.

Asked about the outlook for the growth rate next year, Haddad pointed out that the fiscal framework is the guarantee for controlling expenses. “I believe that the fiscal framework in itself is already a guarantee. You have expense control inherent to the fiscal framework. I don’t know of another fiscal framework in the world that is as sophisticated as the Brazilian one. It was joint work with international organizations, with Congress, economists,” he stated.

The minister also said that the government needs to rebuild the government’s fiscal base which, according to him, has been “dilapidated” in recent years. “By replacing this, things stabilize. The economic growth itself ends up correcting these distortions. We want a path of stability, we are building that, but we also depend on the National Congress. It is not by decree that we will be able to generate this balance”, he reinforced.

Grant MP

Haddad defended the approval of provisional measure 1,185/2023 in the Senate, which defines new rules for the taxation of companies benefiting from subsidies and for the use of Interest on Equity (JCP). Initial estimates indicate that changes to the rule could generate R$35 billion in additional revenue in 2024.

“We worked intensely to clarify the senators about the correction of the matter proposed by the government. This is not a tax increase, on the contrary, the correction was proposed by the Superior Court of Justice, in a historic vote, which gave us 9 to 0, and was even considered by a minister of the Federal Supreme Court who reviewed his own decision 48 hours then, also for the benefit of the matter”, stated Haddad.