Space opened by the PEC dos Precatórios does not go into politics, says Guedes

Economy Minister Paulo Guedes said this Friday (3) that the resources released by the revision in the spending ceiling will not go to politics, considering that the idea of ​​changing the rule did not come from the Ministry of Economy.

In a presentation at the Annual Meeting of the Chemical Industry, Guedes said that the change in the tax rule is technically supported.

“The ceiling revision didn’t come from the economy, but it’s technically sound, and the money isn’t going to politics,” he said.

According to the minister, the fiscal space opened by the PEC dos Precatórios will be directed towards actions such as the Auxílio Brasil program, purchase of vaccines and the tax exemption for companies’ payrolls.

According to him, the approved version of the PEC, which still depends on final validation by the Chamber, is not exactly what the government proposed, but it is satisfactory and provides predictability for public expenditure.

“We would like it to go on forever (the ceiling for court orders), but they only approved it until 2026,” he said.

monetary tightening

Guedes also stated that the process of raising the interest rate by the Central Bank slows down the country’s growth, but he considered that the improvement observed in the pace of investments points to positive data in the activity ahead.

In a presentation at the Annual Meeting of the Chemical Industry, Guedes also stated that Brazil will grow and “come out of the hole”, even if at a slower pace during the fight against inflation.

According to him, the government depoliticized the currency by approving formal BC autonomy.

“On the one hand, we have a deceleration factor, which is the role of the Central Bank to fight inflation, but, on the other hand, we have a factor for sustaining growth, which is the investment rate,” he said.

According to the minister, the proportion of investments in relation to GDP (Gross Domestic Product) reached a peak of 19.4% and should reach 20% in 2022.

Guedes returned to commenting on the GDP result for the third quarter, stating that the figure — which pointed to a 0.1% retraction over the second quarter — was driven by agriculture, which fell 8%, according to him, due to bad weather.

The minister rebutted criticisms that the country is not growing and stated that the “V”-shaped recovery of the activity has already taken place. For him, claims that there is no fiscal support in Brazil are “madness and militancy”.

“Catastrophic predictions haunt us from day one in government. […] It doesn’t mean that I think it’s the best government in the world, but it’s not as bad as they’re saying,” he said.