Simone Tebet says Lula government will announce new PAC – 06/29/2023 – Market

The Lula government intends to launch a new PAC (Growth Acceleration Plan) at the end of July or beginning of August, but it will be different from the previous one, said Simone Tebet, Minister of Planning.

“The government is about to announce new measures. One of them is a new PAC, which will not be a PAC, it will be an investment policy, not only of public investments, but also of partnership with the private sector”, said Tebet, during a participation via video at the Gzero Summit Latam 2023 event, organized by the consultancy Eurasia Group in São Paulo.

“We will have the announcement by the end of July, beginning of August, perhaps before, depending on the president’s agenda, announcing robust investments within the possibilities of public finances. We have a spending ceiling that is valid until the end of the year, so we have difficulty with that,” continued Tebet.

The minister said that the package will include actions that have already been announced. “A lot of stuff is already there and we’re just going to envelop it, put it all together”. As examples, she cited auction concessions for railways, highways and ports that were already announced this year.

“The federal government knows that Brazil will only grow again if it has public and private investment in partnership,” he said.

At the event, Tebet spoke briefly about the CMN (National Monetary Council) meeting that will debate inflation targets for the coming years, and emphasized that the meeting should not bring about short-term changes.

“Brazil needs predictability, credibility and legal certainty. We are not discussing 2024. We are not talking about changing the inflation target. We are discussing 2025 and 2026,” he said.

Tebet also said that he sees that the scenario is favorable for the fall in interest rates, as inflation rates have been falling, and defended the tax reform as a “silver bullet” that will make the country recover growth.

However, the minister says she estimates that the reform will still take time to be approved. She estimates that the proposal will get the approval of the House before the parliamentary recess or until the beginning of August, and that after that there will be months of debate in the Senate.

“I don’t believe in a reform approved before November. The Senate is the home of reflection and the search for solutions to conflicts,” he said.

For her, the two main points of debate about the reform are taxation on the service sector and how to compensate states that may have a loss of revenue with the new rules.