Brasília – The minister of Planning, Budget and Management, Nelson Barbosa, said this Thursday (3rd) that Brazil needs to look for ways to reach a primary surplus of around 2% of the Gross Domestic Product (GDP) to sustain fiscal stability. Barbosa attended the seminar The Role of the State in the 21st Century.
“Today, according to our estimations, Brazil needs to converge to the so called primary fiscal result of approximately 2% of the GDP. Today, unfortunately, we have a primary deficit. We need to converge to 2% of the GDP to sustain fiscal stability and normal conditions of interest rates and growth rates”, he said.
Barbosa and Finance minister, Joaquim Levy, sent to Congress the draft of the 2016 Union General Budget last Monday (31st). The document forecasts a primary deficit for the next year of R$ 30.5 billion (US$ 8.05 billion), which represents 0.5% of the country’s GDP. In July, the government revised down the target of the 2015 primary surplus from 1.1% of the GDP to 0.15% of the GDP.
According to Barbosa, the way to reach 2% of the GDP goes through a consideration over society’s choices and which services and activities the state should offer and how they would be funded. “Thus, the debate on the fiscal adjustment sure impacts the debate on the role of the state, but it’s only a part of this debate. The essential debate in Brazil and in other developed democracies today is which should be the role of the state in this 21st century society”, he said.
*Translated by Sérgio Kakitani
