Urgent Call for Fiscal Reform in Brazil by Planning Minister Tebet

Brazil’s Planning Minister Simone Tebet outlines the necessity for fiscal reforms by late 2026 to ensure economic stability. She emphasizes fiscal adjustments, criticizes Congress for fiscal irresponsibility, and supports changing the workweek and import tax exemptions to address economic challenges and improve public approval ratings.

Simone Tebet, Brazil’s Planning and Budget Minister, indicated a crucial period for fiscal reform in late 2026, expressing that the next president will struggle to manage under the current fiscal policies. In her interview with GloboNews, she stated, “We have reached a point where, in 2027, regardless of who the next president is, they won’t be able to govern under this fiscal framework and these fiscal rules without generating inflation, debt, and damaging the economy.”

She emphasized the necessity for structural fiscal adjustments post-election, whether President Lula seeks re-election or another candidate wins, urging the implementation of tighter fiscal measures to ensure economic stability. “So, we have a window of opportunity…to implement fiscal adjustments, cut spending, eliminate unnecessary expenses, and adopt a stricter framework that doesn’t ‘kill the patient,’ obviously,” she added.

Tebet underscored the importance of a balanced fiscal adjustment to sustain public debt, reduce inflation, and stimulate economic growth, stressing that it is vital not to miss this opportunity. She acknowledged the excessive spending from the transition constitutional amendment in late 2022, but insisted that the government would adhere to its fiscal targets this year without resorting to harmful past policies, declaring, “We will be able to deliver a budget that complies with fiscal rules.”

Criticizing Congress for lacking the expected fiscal conservatism, she remarked, “This is not the fiscally responsible Congress we had envisioned, so there’s no use in fighting a losing battle.” However, she commended Gleisi Hoffmann, the newly appointed Minister of Institutional Relations, for her loyalty to President Lula, believing that she will facilitate the necessary support for economic measures.

Moreover, Tebet indicated the government’s willingness to engage in challenging discussions, such as transitioning to a five-day workweek, which she believes could enhance economic productivity and job quality. “Reducing the workweek boosts the economy, increases productivity, and improves job quality,” she expressed.

Lastly, she noted that the exemption of import taxes on certain food items should yield positive market results within 30 days, potentially alleviating rising food prices and encouraging local production over exports. This policy aims to address President Lula’s declining approval ratings amid the ongoing economic challenges.

In summary, Minister Simone Tebet has highlighted the urgent need for fiscal reform in Brazil, emphasizing the critical timeframe at the end of 2026 for implementing necessary adjustments. She reaffirmed her commitment to achieving fiscal targets amidst legislative challenges while advocating for policies that promote economic growth and stability. Additionally, Tebet’s support for labor reforms and price regulation initiatives reflects the government’s determination to bolster the economy and improve public sentiment ahead of future elections.

Original Source: valorinternational.globo.com