Barbosa reaffirms commitment to fiscal adjustment in talks with investors

Nelson Barbosa, Brazil's new finance minister, told international investors today (Dec. 21) that the government is still committed to the fiscal adjustment and will do what it takes to meet the primary surplus target, set at 0.5% of the GDP, in 2016. The primary surplus is the amount of money saved by the government to pay interest on the debt. The conversation was held through an online conference conducted by the bank J.P. Morgan.

Barbosa's goal is to reassure the financial market and show the government's efforts towards the adjustments in the economy after he was chosen to take Joaquim Levy's place as chief of finance. Levy argued for a target higher than 0.7%.

He went on to say he expects the new Provisional Tax on Financial Transactions (CPMF, in the original acronym) be approved. The tax aims to tackle the social security deficit. He said, however, that he will be forced to find alternative solutions in case the lower house does not make a quick decision.

Barbosa also stressed that there are no changes in the economic policy, and that, apart from the fiscal adjustment, there is the goal of reducing inflation. The National Monetary Council (CMN) set the target at 4.5% for 2016 and 2017, with a tolerance limit of two percentage points next year and 1.5 in 2017.

The minister also talked about the reform in social security as a way to make it more sustainable for the government over the years, and pointed out that this is among the concerns being discussed. According to Barbosa, the economic staff has worked to find an answer to the problem. He mentioned the need for establishing a minimum age for retirees, adding that the government expects to submit that proposal to Congress in 2016.

The minister made a point of saying that Brazil still holds great opportunities for investors.

Translated by Fabrício Ferreira

Relacionadas

Rousseff replaces Joaquim Levy by Nelson Barbosa as Finance Minister