Brazil’s government is preparing a gradual fiscal adjustment intended to respect its campaign commitments while improving the country’s public finances, Finance Minister Dario Durigan said Tuesday, November 3.
Durigan described President Luiz Inácio Lula da Silva’s program as one that makes commitments to different social groups while also seeking fiscal improvement. The Finance Ministry is preparing a proposed constitutional amendment that would allow the government to pursue the center of its fiscal target and freeze additional budget resources if necessary to improve the trajectory of public debt.
The minister also said Lula’s six appointments would be guided by technical standards. He dismissed speculation about a meeting between the president and economist André Lara Resende, saying no meeting had been scheduled.
Lara Resende, one of the architects of Brazil’s Real Plan, has proposed separating the benchmark Selic interest rate from the costs of refinancing public debt. The proposal has prompted concern in financial markets. Durigan called it an early-stage idea with several shortcomings.
Durigan said he had not discussed the succession of the finance minister with Lula. Piauí Governor Rafael Fonteles and Vice President Geraldo Alckmin have been mentioned as possible candidates for the post.
Sources: Folha Mercado.