(Image: REUTERS/Adriano Machado)
The executive secretary of the Ministry of Finance, Dario Durigansaid on Monday that there is discomfort within the government's economic team regarding an “irrationality” in the perception of economic agents about the management fiscalciting “poor speculation” amid criticism from analysts about creative ways to get around fiscal rule restrictions.
In a press conference to comment on the bimonthly revenue and expenditure report, Durigan said it was unreasonable that the government's fiscal recovery efforts were not recognized and argued that the accounts were monitored with great care and with very conservative calculations.
“There is indeed a discomfort in the economic team when we perceive an irrationality in the repercussion, when some facts of reality and numbers that are presented are ignored. The fact is that the fiscal recovery has been made and has exceeded expectations,” he said, arguing that the government is working to maintain and meet the zero fiscal deficit target this year.
According to him, the government made adjustments to its projections in order to ensure that the 2024 accounts are closed “without any type of creativity or artifice” outside of the fiscal rules.
Reuters showed last week that in the face of restrictions from fiscal frameworkthe management Luiz Inácio Lula da Silva began to implement creative solutions to increase spending, in addition to foreseeing the incorporation of revenues into the Budget without the agreement of the Banco Centralwith experts pointing out risks to the credibility of government accounts.
On Friday, the economic team announced that the total budget cuts for ministries to comply with fiscal rules will be reduced from 15 billion reais to 13.3 billion reais, with revenue gains offsetting an increase in mandatory spending.
On Friday and Monday, the dollar rose and the Ibovespa fell, with analysts citing, in part, concerns about the country's fiscal situation.
Among the calculations mentioned as conservative in this review of accounts, Durigan argued that the fiscal report did not consider the raising of forgotten resources in banks, approved by Congress and which still generates divergence on the form of fiscal accounting.
He also mentioned the withdrawal of revenue forecasts from the Tax Appeals Administrative Council (Carf), in addition to conservative estimates with measures approved to allow gains from updating property values. Thus, the accounts could improve if these initiatives generate additional revenue this year, he said.
The secretary also said that analysts' predictions that government spending on social security would be underestimated by up to 40 billion reais are unrealistic. According to him, the government's calculations are conservative.
He emphasized that the economic team is working to maintain the fiscal target and achieve it, arguing that the government still has measures up its sleeve to announce if it considers it necessary to achieve the objective.
In the interview, the executive secretary of the Ministry of Planning and Budget, Gustavo Guimarães, also stated that the government has all the instruments to meet the fiscal target and has shown that it will not change the target.
When announcing the unfreezing of part of the ministries' budgets on Friday, the government pointed out that the change was generated by a release of contingent resources in greater volume than the increase in resources blocked due to higher mandatory expenses.
Guimarães explained that the government had no option of keeping the funds on hold given that revenues were improving. On the other hand, he argued that the extension of the budget freeze would probably be maintained until the end of the year.