There is a new conflict within the government, which will have to be decided by President Luiz Inacio Lula da Silva. Ministerial reform. Ministers Rui Costa (Civil Council), Esther Dweck (Management), and Simon Tebbit (Planning) decided to support a primary deficit of between 0.5% and 0.75% of GDP for the central government (Treasury, Social Security and BC). , in 2024, and we will present the idea to the Budget Council meeting, which will continue until Tuesday 29.
And the proposal could result in a rule recently approved by Congress not being adhered to. The reason: The framework that replaced the spending cap accurately predicts zero primary deficits next year, but that formula depends on raising federal revenue by at least R$130 billion.
The three ministers are scheduled to meet with Treasury Secretary Fernando Haddad, later on Tuesday 29th, and try to convince him to support a larger deficit because they consider the target set to be unrealistic. For example, Tippett has already said something more ambitious is needed.
However, it will not be an easy battle. So far, Haddad has opposed the idea of relaxing the spending increase rule in 2024, an election year.
But it is known that Lula will settle the new conflict. The government sends its 2024 budget proposal to Congress on Thursday the 31st. In practice, economists are already saying that it will be very difficult to cut the deficit to zero next year, especially on the eve of the municipal elections.
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