Haddad: expenses will grow less than 50% of the increase in revenue

“Next year, which is the first year of validity of this new framework, expenditure will grow less than 50% of the increase in revenue in all scenarios projected by both the National Treasury and the Federal Revenue Service”, guaranteed the minister.

According to him, the government expects the project to be approved next week. For this, said Haddad, the government will be available to answer the questions of deputies about the new fiscal framework.

“I want to express the gratitude of the Ministry of Finance and the federal government towards the deputies who approved the urgency of this issue, which is very dear to us. I want to thank the rapporteur, (Cláudio) Cajado, who was a very skilled person in building this expressive vote in the Chamber of Deputies. We hope that, next week, we will have the peace of mind to provide technical support to the Chamber in the accounts that need to be done, in relation to doubts from parliamentarians and on the inclusion of many expenses in the spending ceiling”, said the minister . “We are mobilized and available for the rapporteur and for the Chamber, in general”, added Haddad.

Haddad said he had read the news published this Thursday in newspapers across the country in which analysts pointed out their concern with the changes made by rapporteur Cláudio Cajado to the proposal. In the news, analysts said that the maneuvers made by the rapporteur will ensure an extra space of up to BRL 82 billion for spending in 2024. But, according to the minister, “there is no way” the Executive can spend BRL 80 billion above what was initially envisaged.

“I even read some articles today and I want to say the following, I asked the Revenue and the Treasury to make all the scenario projections. In the worst case scenario, expenditure will grow by less than 50% of the revenue increment. In any scenario, this fiscal rule has a strategy to recompose the primary result, which is for revenue to grow above expenditure at that ratio, or expenditure to grow by 70% or 50% of revenue. This is the basis of the model, or spending grows 70% when fiscal targets are met or 50% when fiscal targets fall short,” explained the minister.

Inflation and growth

When commenting on the rise in unemployment rate in the first quarter of this year, released this Thursday by the Brazilian Institute of Geography and Statistics (IBGE), Haddad said that “first, the data is lower than a year ago. This is the first thing to look out for. Secondly, that effectively we have a deceleration process that has lasted three years and with an increase in interest rates, which have risen in Brazil. It is a very expressive interest rate, so it is natural that the economy suffers a slowdown”.

According to him, the folder intends to revise the projection of the Gross Domestic Product (GDP, sum of goods and services produced in the country). “The secretariat (of Economic Policy) is re-projecting growth to 1.9%. The quarter was relatively good, relatively surprised economists and we understand that we are able to close the year (with growth) between 1.8% and 2%”.

The minister said that the government also projects that inflation this year will be lower than what has been expected by the market. “We have a projected inflation rate of around 5.5%. The market is at the projected rate of 6%,” he said.