For Abilio Diniz, the Transition PEC is not a concern and Brazil will grow 3% in 2023

Businessman Abilio Diniz, from Carrefour, considers himself an optimist. From this state of mind, he says he believes that Brazil will grow between 2% and 3% next year and is confident that Brazil will be the destination for international investments.

In a debate at Insper this Thursday (8), Diniz said he was not concerned with the size of the fiscal impact foreseen by the PEC (proposed amendment to the Constitution) of the Transition. Approved in the Senate on Wednesday (7), it opens space for the elected government to spend R$ 168 billion in two years.

“I am optimistic about what will happen, even at this point [fiscal]”, he said. “We are leaving, this year, a debt-GDP ratio of 74%. This number [os valores da PEC], be around R$ 150 billion, it will not change that much. And, during the four years, there is total capacity to reverse this relationship if the country grows, if there is investment.”

The eventual effect on the balance of public finances –the so-called fiscal risk– is not something that worries him.

In the businessman’s assessment, it is up to the elected government to position itself and present a rigorous plan for controlling public accounts. This nod, according to him, will provide peace of mind for attracting investments.

“Social investment doesn’t worry me, I’m worried about trying to overcome the private initiative, I’m worried about increasing the state machine.”

Alongside banker André Esteves, from BTG, Diniz said he trusts the words of the vice-president-elect, Geraldo Alckmin (PSD), that there will be no fiscal lack of control. Esteves teased him: “But then he tells you that he needs to hand it in.”

The banker, recently appointed as an articulator of the rapprochement between Fernando Haddad, quoted for the new Ministry of Finance, with the financial sector, said he considers the size of the margin of expenses foreseen in the proposed amendment to the Constitution to be exaggerated.

“This PEC that is painting R$ 200 billion, it worsens the conditions for private investment to come”, he said. Esteves defended that the expansion of the deficit in public accounts tends to have an effect on the debt and interest rates, and both should rise, compromising investments and job creation. “I think factually we’re going in the wrong direction.”

At the end of the debate, Esteves said that he could not speak to the press, as he needed to run to the airport.

Still on the subject of the new government, Abilio Diniz said that he will not speak of the eventual ministry until the names are announced.

President-elect Luiz Inácio Lula da Silva (PT) is expected to announce this Friday (9) some names that will compose his ministry. Allies say that he will confirm the names of Rui Costa (PT) in the Civil House, Flávio Dino (PSB) in Justice, José Múcio, in Defense, and Fernando Haddad (PT) in Finance.

The debate at Insper, this Thursday, was organized by RenovaBR, a cross-party political training group.