Brazil: Economists positively evaluate Temer's government measures
Brazilian economists evaluated positively the economic measures announced this Tuesday (May 24) by the federal government to limit Brazil's public spending. Among the measures announced by Finance Minister Henrique Meirelles, there is the setting of a ceiling for the public debt and the return of $28 billion-worth assets from the Brazilian Development Bank (BDNES) to the National Treasury.
For instance, Economics Professor Paulo Roberto Feldmann from the University of São Paulo (USP) said that "from the point of view of cutting spending, it is a good package; It imposes a very good discipline to the market. And makes the BNDES return the money it had in the Treasury. These are good and important things," said Feldmann.
According to him, the measures point out the change in the federal government's economic policy comparing with the suspended President Dilma Rousseff's administration. "If she committed only one mistake, it would have been not to properly address public spending, the tax issue."
He noted, however, that the package of changes is incomplete and did not include measures to generate employment and increase revenues. "That was the country's basic priority, which had not been taken [as priority]. The [tax] collection dropped a lot and I'm curious to know how we will address this issue, from where we will get the money, and this is not clear. This package does not explain it," he noted.
MBA Professor of Economics Mauro Rochlin, from the Getulio Vargas Foundation, pointed out the return of $28 billion-worth assets from the BNDES to the Treasury as a measure to stimulate the economy and possibly add a cash impetus to the government this year. According to him, the measure will create an impact on interest subsidies that the Treasury is required to pay.
"If this money is indeed fully allocated to reduce the public debt, I think it is a positive measure because it also indicates a reduction in expenses that will add to the interest account," he said. He also defended "fundamental reforms". According to him, the pension reform is the most significant among them, and it depends on the legislative branch.
According to Mauro Rochlin the social security problem is that it indicates an exponential and structural growth in expenses. "This is not only to solve a cyclical issue, with a specific deficit. This is to defuse a demographic bomb, which is the change in population age structure. The share of older people are increasingly larger and the share of younger people increasingly smaller in this population pyramid," he stated.
However, the professor explained that it is too soon to analyze whether the measures will produce significant effects on the economy.
Translated by Amarílis Anchieta
Fonte: Brazil: Economists positively evaluate Temer's government measures
