President Luiz Inacio Lula da Silva backed his finance minister’s efforts to approve new fiscal rules, saying he’s sure the plan designed to stabilize Brazil’s public debt will be successful.
(Bloomberg) — President Luiz Inacio Lula da Silva backed his finance minister’s efforts to approve new fiscal rules, saying he’s sure the plan designed to stabilize Brazil’s public debt will be successful.
The leftist president, whose support for the budget measures proposed by Fernando Haddad is crucial to defend the plan and the ministry from friendly fire from his own Workers’ Party, said in a speech marking his government’s first 100 days that the proposal brings “realistic and safe solutions” for balancing public accounts.
“Sometimes I know you hear some criticism,” Lula told Haddad during a cabinet meeting on Monday. “I have to praise you and the team because when it comes to the economy, when it comes to tax policy, we’ll never have 100% solidarity.”
Lula said the new fiscal framework, which sets a ceiling and a floor for the expansion of public expenditures during his government, will surely be approved by congress. The plan largely relies on an expansion of government revenue to deliver growing primary fiscal surpluses until 2024.
Read More: Brazil Could Boost Revenue by $59 Billion Without Raising Taxes
Discussion of the proposal in congress will be closely monitored by the central bank, which has already said it needs to see the measures approved, and their impact on inflation expectations, before deciding whether it has enough room to start cutting interest rates, currently at a six-year high of 13.75%.
Lula, however, reiterated his criticism of the central bank’s tight monetary policy.
“I keep thinking that they are playing with the country, playing especially with poor people and especially with businesspeople who want to invest,” he said.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.