During his participation in the program, the expert also commented that he does not believe that the country is on the verge of an insolvency crisis
During his participation in the new program, economist Felipe Salto, expert in public accounts, drew attention to the severity of the Brazilian fiscal staff. He pointed out that 94% of the country’s budget is rigid. “Only 6% is the slice you can relocate. Within these 6% are investments, machine cost, research scholarships, passport emission, ministries’ cleaning, security and more parliamentary amendments, which in recent years have also added rigidity. This picture needs to be understood because the fiscal situation is serious. We have a large and growing mandatory expense,” he said.
Despite the worrying fiscal scenario, Salto does not believe that he is on the verge of an insolvency crisis. “The National Treasury has a cashier of R $ 1.5 trillion, if he wants to be without a penny of public debt, which is the way governments borrow the market by paying a interest rate, he finances seven months of public decet without issuing a penny.” However, he warned that this feature is finite and that the demand for government bonds continues, although at high real interest rates. The primary public deficit, which does not consider debt interest rates, is 1% of GDP, while the nominal deficit, which includes financial expenses, reaches 8% of GDP, surpassing the United States deficit.
Salto believes that Brazil’s fiscal situation has a solution and that some measures are already being implemented. However, he emphasizes the importance of deepening reforms, especially with regard to expenses.
*With information from Felipe Salto
