Brazil runs serious risk of facing recession without fiscal anchor, says Meirelles

Former Finance Minister Henrique Meirelles reaffirmed this Tuesday (15) that the country will need to approve a license to accommodate expenses in 2023, but stressed that it is essential to approve a clear fiscal anchor later.

“You have to have an anchor, you have to have a ceiling. The limit has to be clear because, otherwise, the country can and runs the serious risk of returning to a climate of recession”, said Meirelles during the Lide Brazil conference, in New York.

Meirelles, who has also presided over the Central Bank, said that the path to fiscal control passes through an administrative reform that includes measures such as the extinction of state-owned companies that no longer fulfill the functions for which they were created and the review of tax benefits.

As for 2023, it will be necessary to approve an exception to the spending ceiling rule to enable the continuity of the payment of BRL 600 to low-income families, according to the former minister.

He also pointed out that the parameters used in the formulation of next year’s Budget are out of date, which strengthens the need for adjustments.

Questioned by journalists at the end of the event, Meirelles said that he did not receive an invitation to take over the Ministry of Finance in the government of the president-elect, Luiz Inácio Lula da Silva (PT). The tendency, according to the former minister, is for the market to be relieved with the announcement of the team, but the reaction will depend on the name chosen.

“It’s not something like that, just everyone is the same. There are people who do a job or have ideas that the market thinks will be more productive to make the country grow, generate income, generate jobs, generate investment,” he said, adding that the market includes the entire productive sector.

For him, the approval of the name of the former president of the Central Bank, Ilan Goldfajn, to the Presidency of the BID (Inter-American Development Bank) would be a “great addition for Brazil”.

Ilan was appointed to the IDB by the Jair Bolsonaro (PL) government and the election is scheduled for November 20. Former finance minister Guido Mantega, Lula’s adviser, even sent a letter to the US government asking for support in postponing the choice, which did not happen.

“I defend the idea that the new government should support Ilan, who is an excellent name, and not enter into a question of party affiliation,” said Meirelles.