The improvement in public accounts in 2021 was due to the spending control implemented by the federal spending ceiling, said today (28) the Minister of Economy, Paulo Guedes. He called the primary result of the Central Government (National Treasury, Social Security and Central Bank) last year “extraordinary”, which pointed to the smallest fiscal deficit since 2014.
“There were doubts, criticisms, accusations of fiscal populism, all of which were wrong about our accounts. We had an extraordinary deficit result of 0.4% of GDP [Produto Interno Bruto]of R$ 35 billion only”, declared the minister during the presentation of the primary result in 2021.
Guedes admitted that inflation came higher than expected, but countered criticism that inflation boosted government revenues last year. For Guedes, the recovery of the economy after the most acute phase of social distancing measures in 2020 was the main factor for the better performance of public accounts.
“If inflation were a solution to revenue, why, when we went to 5,000% [de inflação], in the Sarney government, or at 2,000%, in the government of Itamar, or even in that of Dilma, when there was 15%, there was no increase in collection, nor did we solve the problem of public accounts? It’s not inflation that solves it, it’s controlling expenses. A V-shaped recovery came, as I said, it came back from the bottom with strength”, said Guedes.
According to the minister, the strong interest rate hikes promoted by the Central Bank in the second half of the year and the withdrawal of fiscal stimulus by the economic team throughout 2021 will allow inflation to have a soft landing this year. “The central banks of the world are sleeping at the wheel. The more hesitant monetary policy is, the harder it will be to fight inflation,” he declared.
functionalism
Regarding spending for this year, the minister said he was right to freeze the salary of civil servants until the end of 2021. At a time when several categories promote protests and strikes, Guedes said that it makes no sense for the government to grant readjustments this year. because the pandemic is not over yet.
“We were right when we didn’t let the resources destined to fight the pandemic turn into salary increases. We had the courage to control the Budget, without salary readjustments. What’s the point of asking for a salary readjustment even now, still at war [contra a pandemia]?” asked the minister.
For Guedes, in recent years, the government has prioritized spending on health in 2020, and the cut in spending in 2021 will not be repeated. “The adjustment made in 2021 will not happen again. The sacrifice has already been made. The current generation paid for their war [contra a pandemia]”, declared Guedes.
support measures
The Minister of Economy promised measures to support employment and companies in 2021. Without citing details, he said that Congress should reassess the provisional measure that creates the Bonus de Inclusão Productivo, a youth qualification program. Presented last year, the proposal was rejected in the Senate.
As for small businesses, Guedes promised to renew credit programs aimed at micro and small companies. He mentioned programs that have been in force in recent years, such as the National Support Program for Micro and Small Businesses (Pronampe) and the Investment Guarantee Fund (FGI).
Earlier this year, President Jair Bolsonaro vetoed a special small business debt refinancing program. In return, the economic team launched a program of renegotiation of micro and small business debts registered in active debt and extended, for two months, the payment of debts of companies that have to renew their membership of Simples Nacional.
