• Categories
  • Archives

A Plan to End Brazil’s Fiscal Deficit

A significant strand of economic thought both within and outside the Brazilian government, as well as a goodly share of the institutions and corporations responsible for the country’s Gross Domestic Product (GDP), will be represented at a dinner tonight in the federal capital.

The centerpiece is an idea that has been filling newspaper pages in recent weeks, eliciting praise from entrepreneurs, members of the government, and opposition leaders, but drawing strong criticism from the Left and civil society: to eliminate the country’s fiscal deficit.


The reception is being organized by ex-Minister of Finance, Federal Deputy Delfim Netto, from the PP (Partido Progressista – Progressive Party) of São Paulo.


The Brazilian government currently runs a primary surplus – which means that it spends less than what it collects, provided debt interest expenses are disregarded.


So, despite large primary surpluses, the country continues to run a deficit, due to interest expenses. Delfim Netto’s idea is to eliminate this deficit.


The country’s fiscal commitment targets (roughly, what the country pledges to save to cover its debts) are mainly intended to maintain the confidence of society and the markets in the country’s ability to pay what it owes, which is largely reflected in the country risk assessment made by specialized agencies.


The country’s current fiscal policy is to obtain a primary surplus (federal government receipts minus expenditures, excluding interest and amortization payments) equivalent to 4.5% of the GDP.


That is, the country saves the equivalent of 4.5% of the GDP, savings used to pay interest on the debt.


One of the hypotheses for achieving the target proposed by Delfim Netto is to raise the Untied Portion of Federal Receipts (DRU), which presently allows up to 20% of the budget to be spent in areas not stipulated in the Federal Budget.


At least three Ministers are expected to attend the dinner: Antônio Palocci, of Finance, Paulo Bernardo, of Planning, and Jaques Wagner, of the Economic and Social Development Council (CDES, Conselho de Desenvolvimento Econômico e Social).


ABr – www.radiobras.gov.br

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Writer’s Guidelines

Your Article and Photo BRAZZIL is always open to new articles. We are interested ...

Employment Rate Up But Hours Worked Down in Brazil

Brazil’s National Confederation of Industry (CNI) released, yesterday, its industrial indicators for July. The most ...

Without Brazil, Indy Is Not the Same

Brazilian drivers Kanaan and Junqueira ended 2nd and 5th at Indy. Still this was ...

In Brazil Our Solutions May Be Creative, But They Are Also Stupid and Unjust

Brazil is a country that is highly creative in social politics, finding ways to ...

After NY and Paris, Brazil’s TAM Gets to Fly to London Daily

While once pride of Brazil Varig is in the throes of death TAM S.A. ...

Brazil Is Not Feeling that Immune to Global Crisis Anymore

Some Brazilian experts believe that no one is going to profit from the international ...

Making Police Less Threatening than Bandit Is Challenge for Brazil

Representatives of 12 South American countries are meeting in BrasÀ­lia, capital of Brazil, for ...

How Christ Met Marx in Brazil

Although Brazil has a great number of religious denominations, about seventy-five percent of its ...

Brazil’s Reason to Fight Inflation: To Narrow Inequalities

Inflation represents a "powerful" mechanism of income concentration and must be controlled to prevent ...