With public spending considered high as a proportion of GDP (Gross Domestic Product), Brazil depends on the private sector to finance its deficit, points out José Márcio Camargo, chief economist at Genial Investimento.
“The Brazilian government spends approximately 40% of GDP every year, and has a public deficit that needs to be financed with increased debt. And the increase in debt requires someone to finance it. That someone is always the private sector”, he said in an interview with CNN this Saturday (19).
In this scenario, the economist reinforces the importance of a fiscal anchor as the ceiling to control spending.
“The cap has two advantages: limiting spending and forcing society to choose priorities. That is, if I need to increase health spending, I have to reduce it with something else, ”he says.
Brazil has expenses that should not be considered a priority in the current tight budget scenario, according to him. “Example: we have approximately 4% of GDP allocated to tax incentives for companies, which are often incentives that have existed for decades, and which are not reviewed, simply because there is a lobby that guarantees these incentives”.
See full interview in the video.
*Published for Ligia Tuon
Source: CNN Brasil
A journalist with over 7 years of experience in the news industry, currently working at World Stock Market as an author for the Entertainment section and also contributing to the Economics or finance section on a part-time basis. Has a passion for Entertainment and fashion topics, and has put in a lot of research and effort to provide accurate information to readers.
