Government returns to discuss new fiscal rule next week

The new fiscal framework was not released this Friday (17), as expected. The Ministers of Finance, Fernando Haddad, and of Planning, Simone Tebet, in addition to other government ministers, met, this afternoon, with the President of the Republic Luiz Inácio Lula da Silva (PT) to discuss the proposal for the new ceiling expenses, but the meeting was closed without any explanation on the matter.

There was a huge expectation for the disclosure of the content of the proposal that should replace the current spending ceiling as a control rule for the growth of spending and public debt. However, the changes follow in secret, with only speculation and general lines already pointed out by Haddad and Tebet.

Despite continuing without a definition, Lula had already informed that he will define the fiscal rule, before his trip to China, scheduled for March 24th. A new meeting to discuss the proposal should take place next week.

Earlier this week, Haddad had confirmed that he had finalized the design of the fiscal framework approved by the different teams in the economic area, and handed the project over to Lula in a quick meeting on Tuesday. Asked if he had already seen the text on a visit to Itaipu this Thursday (16th), the president said that he had not yet and that he would only become fully aware of it this Friday (17th).

Last week, Minister Simone Tebet said that the design of the new fiscal rule will “please everyone, including the market” when asked about the general lines of the project. “The fiscal framework will eliminate Brazil’s fiscal deficit, which today stands at more than R$230 billion, in addition to the concern with stabilizing the debt/GDP”, said the minister.