Economist Aod Cunha said, in an interview with CNN, this Tuesday (8), that the war in Ukraine and the consequences on the world economy should make countries “increase spending, including their war investments. Therefore, all this will increase public spending at a time of high inflation”.
For the economist, from this increase in spending, “governments should be more tolerant with the persistence of inflation for longer” than was being predicted.
Cunha believes that it is not possible to have measures to expand spending and tolerate the fiscal deficit “without the counterpart of higher inflation”, a scenario in which the world is currently inserted.
In addition, the economist also spoke about the options that Brazil can follow to try to stop the increase in fuel prices, caused by the lower supply and great demand for the commodity. Cunha understands that a combination of factors is needed to reduce the price.
“It is necessary to combine the reduction of taxes, with a withholding of the distribution of dividends from Petrobras, plus an additional expense of the government itself. The big problem with subsidies is how to withdraw them afterwards, but we are in a war scenario,” he says.
Finally, Cunha believes that freezing prices would be a mistake. “I hope the government does not make this type of measure, as it would be an excessive cost for public spending.”
See more in the video above
Source: CNN Brasil
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