Institution raises doubts about what will be considered in next year’s fiscal calculation, especially after excluding significant expenses such as the funding of emergency actions in Rio Grande do Sul
The recent package approved by the National Congress has generated heated debates about its effectiveness in resolving Brazil’s fiscal issue. According to the (Federation of Trade in Goods, Services and Tourism), the proposed measures are not sufficient to stabilize the proportion between debt and GDP (Gross Domestic Product) in the coming years. The entity criticizes the package for not adequately addressing the problem of the fiscal framework, a concern that was echoed by the Minister of Finance, . Fecomercio raises doubts about what will be considered in next year’s tax calculation, especially after the exclusion of significant expenses this year, such as the payment of court orders and the funding of emergency actions in Rio Grande do Sul.
Fecomercio argues that the package focuses on slowing the rise in spending, rather than implementing real cuts, which would be necessary to stabilize the debt/GDP ratio. In the last two years, this ratio has increased by 10 percentage points, reaching around 78%. The federation warns that the effect of the package is temporary and that the country will likely need another fiscal plan soon. The government’s response, considered more political than economic, highlights the need for an administrative reform that puts spending reduction at the center of discussions. Despite being expected, the announcement of the spending cut is seen as insufficient to face the challenges of next year.
The package, according to experts, also exposes the structural fragility of Brazilian public finances and the lack of long-term planning. Although it offers momentary relief, it does not address the root causes of the fiscal problem, such as the low efficiency of public spending and the inability to promote sustainable economic growth. Without significant changes, Brazil would run the risk of continuing to be trapped in cycles of fiscal adjustment, postponing a definitive solution to its economic problems. The reaction from Congress and the markets has already placed the government in a defensive position, indicating that these issues will need to be addressed more seriously in the future.
*With information from Misael Mainetti
*Report produced with the help of AI
