Brazil’s Minister of Finance, Antonio Palocci, said that the government will pursue the commitment of not raising taxes higher than 2002 rates and will maintain a primary surplus equivalent to 4.25% of the Gross Domestic Product (GDP) in 2005.
During a press conference, the Minister said that the decision not to renew the arrangement with the IMF “does not mean abandoning the microeconomic reform agenda and the fiscal measures to control inflation and to stimulate external commerce.”
Palocci recalled that in order to reduce the tax burden, 21 important measures were taken last year, in the areas of real capital, long-term savings, and consumer goods prices.
He mentioned that the numbers are “the best in 20 years. We had the highest economic growth in the last 10 years. In addition, industrial production in 2004 was the highest in 18 years.”
The objective of the Brazilian policy, he added, is to keep reducing public debt, as has been occurring in the past months, with an increase in government savings and the implementation of social and structural measures.
According to the Minister, Brazil will pursue sustained growth with the positive evolution of the companies and the balance of external accounts. “The valorization of workers and the increase of family income are also a priority.”
Palocci said that the pilot project for infrastructure investments is not linked to possible arrangements with the IMF: “We have said that such projects can help to strengthen countries’ fiscal balances in the medium and long terms.”