What Brazil can do to get out of the fiscal rut - Issue #1503
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Faced with an unfeasible budget for 2023, the newly elected Lula government negotiated a PEC with Congress that would free up spending in the region of R$145 billion; in return, the Executive Branch was supposed to present a new fiscal rule to control public accounts. It came: the so-called fiscal framework was approved by the Legislature and even celebrated by part of the financial market. A little over two years later, it shows signs that it is not going to stand still.
A multifactorial problem. The Executive insists on trying to achieve fiscal balance only on the revenue side, by increasing the tax burden, without indicating how it will contain the growing increase in expenses. And it ignores the structural problems of the public accounts.
Congress is missing the opportunity to move forward with an agenda capable of resolving the fiscal crisis and is keeping a turbocharged budget under its control: R$50 billion this year alone, 25% of all government discretionary spending – a percentage that is far from the world average.
The same can be seen in the Judiciary, which costs 1.43% of Brazilian GDP, well above the average for emerging economies (0.5%) and advanced economies (0.3%).
In this episode, Natuza Nery talks to Bruno Carazza to explain what can be done to help Brazil untangle its fiscal knot. A commentator for Jornal da Globo and a columnist for the newspaper Valor Econômico, Bruno measures the size of the Brazilian “bomb.” He, who is also a professor at Fundação Dom Cabral, outlines alternatives to solve the problem and concludes how decisions made by the three branches of government increase public spending.
What you need to know:
The podcast The Subject is produced by: Monica Mariotti, Amanda Polato, Sarah Resende, Luiz Felipe Silva, Thiago Kaczuroski and Carlos Catelan. Presented by: Natuza Nery.
Water mirror at the Planalto Palace, in Brasília — Photo: Ricardo Stuckert/PR
O Assunto is the daily podcast produced by g1 , available on all audio platforms and on YouTube . Since its debut in August 2019, the O Assunto podcast has had more than 161 million downloads on all audio platforms. On YouTube, g1 's daily podcast has had more than 12.4 million views.
How to untie the fiscal knot in Brazil
Globo
