Folha and FGV-Ibre discuss new tax regime and growth – 02/15/2023 – Market

Minister Fernando Haddad (Finance) announced that the Lula government will anticipate the presentation of a new fiscal regime to March to replace the spending ceiling approved in 2016, in the Michel Temer government.

To discuss the need for and alternatives to the new mechanism, the Sheet and FGV-Ibre (Brazilian Institute of Economics) are holding this Thursday (16), starting at 10 am, the online seminar “The fiscal issue and the country’s growth”.

The new framework will prioritize stabilizing the relationship between the size of gross public debt and GDP, the main indicator of a country’s solvency.

Brazil ended 2022 with this ratio at 73.5%, below expectations, but due to more inflation and non-recurring revenues from the sale of commodities and transfers from state-owned companies to the Treasury.

For 2023, however, after the approval of extra expenses of around R$ 180 billion with the Transition PEC, the expectation is that the debt/GDP ratio will reach 80%. According to the International Monetary Fund, Brazil has the worst indicator among all emerging countries.

To talk about the new fiscal framework and the influence of lack of budget control on inflation and economic activity, the event will feature Bráulio Borges, associate researcher at FGV-Ibre, and Manoel Pires, coordinator of the agency’s Fiscal Policy Observatory. The meeting will be mediated by the special reporter of Sheet Fernando Canzian.