Minister Simone Tebet has indicated that Brazil has a critical opportunity for structural fiscal adjustment in late 2026. She warned that after 2027, governance under the current fiscal rules would lead to economic instability. Tebet emphasized careful adjustments aimed at sustainability and growth while criticizing Congress for fiscal irresponsibility. She also praised new Minister Gleisi Hoffmann and called for tackling significant issues like workweek reforms to boost productivity.
On Wednesday, Planning and Budget Minister Simone Tebet stated that Brazil has a critical opportunity for structural fiscal improvement in late 2026. She warned that starting in 2027, the new president would be unable to govern effectively under the current fiscal framework, as it would lead to inflation and increased debt.
Minister Tebet emphasized the importance of initiating fiscal adjustments that include spending cuts and a more disciplined fiscal regime. She conveyed that this must be done carefully to maintain public debt sustainability, lower interest rates, and promote economic growth. “We cannot afford to miss this window of opportunity,” she asserted.
Furthermore, she acknowledged that the transition constitutional amendment passed in late 2022 resulted in excessive spending to restore social programs; however, she remains confident that the government will meet its fiscal targets without resorting to illicit subsidies or ineffective past policies.
Ms. Tebet critiqued Congress for lacking the fiscal responsibility anticipated by the government, stating that they had hoped for a more fiscally conservative legislative partner. She indicated the need to end the ongoing struggle for fiscal pragmatism.
Additionally, she praised Gleisi Hoffmann, the new Minister of Institutional Relations, for her commitment to President Lula and the government’s economic agenda. Despite past policy differences, she believes that Ms. Hoffmann will support vital economic measures necessary for legislative progress.
Moreover, Minister Tebet called for courage in addressing challenging issues, such as the proposed change to a five-day workweek, which she believes would enhance productivity and job quality.
Lastly, she mentioned the anticipated positive impact of exempting import taxes on select food items within 30 days, aimed at easing food prices and encouraging local market engagement. This initiative is part of the broader response to President Lula’s decreasing approval ratings, connected to rising food costs.
In conclusion, Minister Tebet has highlighted a pivotal moment for Brazil to reform its fiscal policies, pinpointing late 2026 as the ideal timeframe for these essential adjustments. She underlined the necessity for government coherence, Congressional support, and public dialogue to drive fiscal stability. The proposed changes, including adjustments in the workweek and import tax exemptions, aim to stimulate the economy and enhance the sustainability of public finances. Failure to capitalize on this opportunity could lead to significant economic repercussions.
Original Source: valorinternational.globo.com
