Padilha: raising revenue precedes changing target – 10/31/2023 – Market

Minister Alexandre Padilha (Institutional Relations) stated this Monday (30) that the federal government’s priority is to approve the measures being processed in the National Congress and that there is no discussion at the moment about sending a message to parliament foreseeing a change in the target of fiscal deficit.

“It doesn’t make sense for us to have any discussion about fiscal targets before concentrating our work on measures that guarantee increased revenue”, stated the minister.

As shown by Sheetmembers of the government started to discuss sending a message to the National Congress with the review of the target of zero deficit in public accounts, after President Lula (PT) himself declared that “it is unlikely” the country will fulfill this promise next year.

Still according to members of the Palace, the target under debate would be 0.5% for 2024. But it can be reevaluated.

President Lula (PT) brought together the Coalition Council, which brings together presidents and leaders of the acronyms that make up the government base, for the first time after the ministerial reform and the change in command of Caixa.

About two months ago, the PP and the Republicans entered the first echelon of the Lula government. André Fufuca (PP) took over the Ministry of Sports, while Silvio Costa Filho (Republicans) went to the Ministry of Ports and Airports. Furthermore, last week, the president decided to dismiss Rita Serrano as president of Caixa and will give the position to an ally of the president of the Chamber, Arthur Lira (PP-AL).

This Tuesday’s meeting was with leaders of the base parties in the Chamber. Next week, a similar meeting is expected to take place with Senate representatives.

After the meeting, Padilha avoided answering questions about the government’s fiscal target change, stating that the topic was not discussed at the meeting or even within the government.

The issue of the fiscal target has gained great importance since last week, when Lula contradicted what the Minister of Finance, Fernando Haddad, had been defending.

On Friday (30), during breakfast with journalists, President Lula stated that it is unlikely that the federal government will meet the fiscal target of zero deficit in 2024 and also added that this does not need to be the target milestone of his administration.

The statement directly contradicts what had been defended by Haddad. The speech had a huge impact on the market that day.

“Let me tell you something. Everything we can do to meet the fiscal target, we will meet it. What I can tell you is that it doesn’t need to be zero. We don’t need that. I’m not going to establish a fiscal target that obliges me to start the year by cutting billions in works that are a priority in this country”, said the president, in response to a question from the Sheet.

The Brazilian stock market plummeted and the dollar rose after the statements. Interest futures contract rates also advanced.