Finance Minister Fernando Haddad insists that Brazil’s fiscal situation is under control and is only not better because this government inherited a deficit from the previous administration
The minister’s speech contains a serious basic conceptual error. Government result (deficit or surplus) is a flow measured over time, and not an accumulative stock variable. In a simpler way, if a deficit is found in one year; in the following period, the account resets and everything is calculated again. This is different from debt, which accumulates over time.
Another point in the speech that draws attention is that the minister completely ignores that the fiscal target was reached by not including expenses in the calculation, such as court orders and part of education and health expenses.
The problem is that not taking it into account in the calculation does not mean that the public accounts are in order. On the contrary, debt only grows with the prospect of increasing even further in 2026.
Haddad’s strategy of blaming the previous government for fiscal incompetence is an old PT tactic. Who doesn’t remember FHC’s “cursed heritage”. This narrative no longer works. And, in fact, Haddad will leave the ministry, leaving a fiscal bomb for 2027, which will not resist any narrative or creative accounting.
*This text does not necessarily reflect the opinion of Jovem Pan.
