2019 budget unable to meet "golden rule", says Planning minister
Brazil's Planning minister, Dyogo Oliveira, said today (Jan. 30) that the budget propposal for 2019 cannot be composed preserving the so-called "golden rule". The ministry's team is already working on the propposal to be sent to Brazil's Congress by the end of August and studying ways to address the issue.
"Right now there is an intense technical and judicial discussion, comprising government departments and the Federal Court of Auditors, so we can outline how to address this issue for 2019", the minister said.
Determined by Article 167 of Brazil's Constitution, the "golden rule" establishes that the government can only get into debt to finance capital expenses or refinance public debt. It is prohibited to issue bonds to cover operating expenses.
For 2018, the government can count on the payment of $ 41 billion lent to Brazilian Development Bank (BNDES) by the National Treasury. An increase in revenue is also expected. For next year, however, other options will have to be looked into.
According to Dyogo Oliveira, the pension system reform would be the permanent solution for the problem, since a considerable part of Brazil's fiscal deficit is related to the country's retirement system.
Translated by Mariana Branco
