The Autonomous Committee of the Fiscal Rule (Carf) issued a statement on the Medium Term Fiscal Framework (MFMP) 2022, in which the organization recognizes that although the publication of the document shows the country’s efforts to strengthen and stabilize public financesthere is still a long way to improve.
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“Despite the fact that the MFMP shows a downward path of the fiscal deficit that is consistent with what is required by the transition of the fiscal rule, we must not lose sight of the fact that the observed deficits are very high. The house is not yet in order, the Medium-Term Fiscal Framework traces the path to order it”, states the document.
According to the Committee, it is highlighted that the MFMP 2022 accounts for the effort of the National Government to consolidate fiscal accounts after the pandemic, bearing in mind the investment and spending needs and with the budgetary, financing, and fiscal rule restrictions. Thus, a “significant deficit adjustment by 2022”, because while a year ago an imbalance of $83 billion was projected, now it is forecast at $75 billion.
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This, according to Carf, responds to the good economic growth, high oil prices and Dian’s management.
“Despite these results, the deficits produced in the years of the pandemic, the depreciation of the peso and inflation have taken the Government’s indebtedness to historically high levels, to the point where it would not be prudent to increase the debt”, assures the Committee.
In the statement, Carf also maintains that more than a quarter of the Nation’s tax revenues should be allocated to interest payment in 2022, because this obligation diminishes the capacity of the Government to invest in other programs.
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