Government needs to cut R$40 billion in spending in 2025, says Salto

The chief economist and partner of the broker , says that the fiscal package of the president’s government (PT) “it needs to have at least R$40 billion” in 2025. For the specialist, this is because revenue should not grow “so robust” as in 2024.

The Minister of Finance, , to the top of Congress that the government must cut R$30 billion in 2025. “I think R$30 billion for next year is low”declares Salto to the Poder360.

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Among the measures on the government’s menu that must be sent to Congress is the rules of the fiscal framework, approved in 2023. With this measure, the adjustment would be, at most, 2.5% above the INPC (National Price Index). Consumer).

The government’s objective is to impose the same spending ceiling as the fiscal framework on mandatory expenses – such as social security benefits, salary bonuses and unemployment insurance, for example. These programs are indexed to the minimum wage.

“The government needs to present a relevant package, not only with measures that have an effect over time, but also in the short term, because we have a significant deficit and a debt that never stops growing”says Felipe Salto.

The economist assesses that eliminating some tax exemptions, such as the deduction of medical expenses from Personal Income Tax, would ensure resources for the government. “We could save R$25 billion by ending this tax expense alone”these.

Salto claims that expenses continue “growing a lot” and that the public deficit “expected for this year is something like R$60.4 billion according to Warren’s projection”.

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MILITARY IN THE PACKAGE

The military made a gesture to the Treasury and if. One of them concerns a minimum age of 55 to move to the reserve.

They should also end the call “fictional death”when soldiers are considered unfit for service and expelled. Even in these cases, family members continue to have access to benefits and receive wages.

Salto assesses that the area is “politically sensitive”but it needs to go through these changes. “It is a kind of ripe fruit that is close to your hands. Everyone has to give their share of collaboration, this is fundamental, it is not possible to have a special pension for one type of worker, even if that worker is, in this case, a soldier”it says.

PERSE

Federal Revenue data that digital influencers, , and large restaurants had access to the (Emergency Program for the Resumption of the Events Sector) from January to August 2024. Among the names that stand out are those of digital influencers and .

“O Perse is a typical example of a good intention that becomes a kind of monster that you can no longer control. […] Of course, you can’t throw the baby out with the dirty bathwater, because there are some waivers that make sense, benefits that actually generate employment and that have clear compensation and a defined deadline, but this is not the case with a large part of these tax waivers”declares Salto.

Here are other points from the interview:

• public debt – “There is a long way to go before generating primary surpluses, which is what we need to do to stabilize the debt-GDP relationship”;

• fees – “We understand that a cycle of increases of half a percentage point still persists. We will probably still have the Central Bank leading this cycle of monetary tightening until we have a solution to this problem, which is the fiscal issue, or at least the beginning of a solution that more clearly attacks public spending”;

• inflation – “We are heading towards inflation much higher than the target set by the National Monetary Council. This, in a way, is worrying. It also has to do with pressure on the exchange rate and the very high interest rate itself ends up requiring significant public spending”;

• exchange – “There are exaggerations in the pricing of exchange rates and interest rates. There is no point fighting with the market, you have to take concrete actions that convince economic agents that there is a better situation than what they are summarizing”;
• relationship with USA – “I understand that regarding the more protectionist bias that the president’s economic policy has, this will not affect us in a neuralgic and direct way. Because what we practice in terms of trade, exports and imports and the good diplomacy we have in Brazil […]this guarantees a certain stability”.