The governor of , (Republicans), has made predictions that , which could negatively impact the state’s investments.
In the reports, even with interventions in the exchange rate through . This, he assesses, would be a reflection of the government’s loss of credibility on fiscal issues, which would be out of control.
The result, in the predictions of the head of the São Paulo Executive, would be rising inflation next year, which at first would even generate an artificial increase in the state’s revenues.
In a second stage, however, the economy is expected to suffer a strong slowdown, caused by rising interest rates, which would put pressure on the state’s cash flow and discourage private investment.
Appointed as , Tarcísio has reinforced that maintaining the state’s fiscal health is a priority for his government. It is likely that it will be necessary to hold back on investments and expenses, especially in the second half of the year.
For this reason, he intends to reduce tax exemptions, which generates resistance from affected sectors. A current example is the pressure from bars, hotels and restaurants against the end of the ICMS reduction from January.
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