Read this Thursday’s edition of the FolhaMercado newsletter (30) – 03/30/2023 – Market

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Experts call for pause on AI research

Elon Musk, dozens of technology executives, AI (artificial intelligence) experts and other personalities called on Wednesday for a six-month break in the development of technologies more powerful than ChatGPT-4, the OpenAI model launched this month.

The document (here, in English) states that “contemporary AI systems are managing to compete with humans in general tasks” and engages a series of questions:

• Should we let machines flood our information channels with advertisements and falsehoods?

• Automate all jobs, including satisfying ones?

• Develop non-human minds that might eventually outnumber us, outwit us, and replace us?

• Risk losing control of our civilization?

The text states that decisions like these shouldn’t be outsourced to technology leaders who weren’t elected by anyone. It also says that powerful AI systems should only be developed when we are confident that the effects will be positive and the risks manageable.

In addition to Musksign the letter historian Yuval Noah Hariri –who has been expressing concerns about generative AI–, Apple co-founder Steve Wozniak, members of the Google AI laboratory and executive engineers from Microsoft, OpenAI partner.

The document was not supported by anyone from OpenAI and other startups that have taken the lead in developing generative AI.

• In an interview with the Wall Street Journal, OpenAI CEO Sam Altman said that GPT-5 training has not yet begun and that the open letter “preaches for converts”.

• “We’ve been talking about these issues longer and more intensively,” Altman said.

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The new tax rule

The design of the fiscal rule that will replace the spending ceiling and has been the focus of the country’s economic discussion foresees that the growth of federal expenses will be limited to 70% of the increase in revenue projected for the same year.

• The information obtained by Sheet, point out that the government intends to work with a new restriction on expenses, which would grow at a slower pace than revenue.

• The final version of the new framework was presented this Wednesday by Minister Fernando Haddad (Finance) to President Luiz Inácio Lula da Silva (PT) and Congress leaders.

in numbers: the government’s forecast is that the deficit, projected at 1% of GDP this year, will be zeroed in 2024.

• In 2025, the estimate indicates a primary surplus (collection greater than expenses, without considering interest payments) equivalent to 0.5% of GDP. For 2026, the positive balance would be 1% of GDP.

The main points of the new rule:

• When projecting revenue growth for the following year, the government obtains, as a consequence, the expenditure advance limit.

– Example: with an estimated increase in revenue of 2% in real terms and the percentage increase in spending on it of 70%, the increase in expenditure could be up to 1.4%.

• Some expenses will be left out, including Fundeb transfers and financial aid for states and municipalities to fund the nursing floor.

• To prevent expenses from soaring or falling along with revenues in atypical years, the idea is to predict that expenditures have a ceiling – when revenues reach heights – and a floor – when revenues drop a lot.

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Gasoline price pressure

The state governments reached an agreement to implement the single ICMS rate on gasoline and ethanol, which will begin to take effect on July 1st.

in numbers: the charge will be BRL 1.45 per liter, higher than the amount charged until the second half of the month, according to data from Fecombustíveis (National Federation of Retail Fuels and Lubricants).

• Today, the highest ICMS on gasoline is charged in Piauí, at R$ 1.24 per liter. In São Paulo, the current rate is equivalent to R$ 0.89 per liter.

• The change could cause an average increase of 11.45% in the price of gasoline, in the calculations of economists at Warren Rena.

Understand the change: with the law sanctioned by former president Jair Bolsonaro (PL) in June last year, fuels are now considered essential items, and therefore, could not have a rate higher than 17%.

the same case applies to diesel, whose new rate, of R$ 0.95 per liter –above what is charged today–, will come into force on April 1st.

double increase: the state tax will begin to be levied on gasoline only in July, but federal taxes were re-encumbered in February.

• As shown to Sheetthe return on collection ended up generating a greater increase in pumps than estimated by the market.

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Hyperinflation in Argentina

From the outside, the contrast between the financial situation in Argentina and the movement in the streets of Buenos Aires, with people consuming and having fun in cafes and restaurants, may seem strange.

Understand: inflation erodes the value of unspent pesos. Over the past 12 months through February, prices rose 102.5%the highest rate since 1991.

• The devaluation of the peso is the result of erratic economic policies, which led the country to go through nine major crises in a period of 40 years. To make matters worse, Argentines are experiencing the worst drought in 60 years, which hits the national agriculture in full.

• Last week, he decided to oblige state companies to sell or exchange bonds in dollars for new papers in pesos, injecting around $4 billion in BC reserves. At the same time, he printed more 130 billion pesos to honor payments.

Numbers that explain the situation in the country:

• $100 are converted into 39,000 pesos on the parallel exchange rate, twice as much as a year ago.
• 10 times Argentina’s public accounts closed in the black for more than a century.
• 15 percentage points was the jump in the poverty rate over the past ten years.
• 82% of the fiscal deficit in 2022 was only subsidies, mainly for energy.

More on Argentina’s crisis

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