Government target requires “brutal increase” in taxes, says economist

The chance of zeroing the primary deficit as of 2024, as the government intends, is close to zero. The assessment is by Gabriel Leal de Barros, chief economist at Ryo Asset and former director of the Independent Fiscal Institution (IFI). Analysts estimate that an additional collection of at least R$ 100 billion is needed to close the hole.

“It’s unfeasible; unlikely that this target will be met. There has to be a brutal increase in the tax burden and, as it happens from one year to the next, it is even difficult to see in which headings the government would be able to move to have a collection of that size ”, he explains.

In addition to the announced measures being insufficient, the economist considers that the revenue projections are overestimated by the government. The estimate of the PT administration for the growth of economic activity would also be very high.

While the Economic Policy Secretariat (SPE) of the Ministry of Finance estimates a 2.3% increase in next year’s GDP, the financial market median projects a result of 1.3%, according to the latest edition of the Focus report, released by the Central bank. “This point below takes at least R$ 30 billion from the government”, says Barros.