The purpose of the new fiscal framework
Posted: Thu Feb 20, 2025 4:41 am
In addition to maintaining sound planning and economic stability, the new fiscal framework aims to ensure sustainable economic growth. This means that greater predictability for public finances is among the main objectives of the new proposal.
In practice, what the government needs to balance its revenues and expenditures is to predict how much it will cost to finance public services , while at the same time keeping the country's debt under control.
According to the text presented, the main points of the proposal address issues such as:
The promise to eliminate the primary deficit in 2024, with a surplus of 0.5% of GDP in 2025 and 1% in 2026;
The limit on growth in federal spending is 70% of the change in revenue over the previous 12 months (spending must grow less than revenue);
The forecast of a floor and a ceiling for the growth of primary usa mobile database expenditure, with ranges between 0.6% and 2.5% of GDP per year.
The Finance Minister said the proposal is a combination of the best of the Budget Guidelines Law and the current spending cap, implemented under the government of former President Michel Temer. The combined rules show that the higher the GDP and revenue growth, the higher the public spending cap will be .
The expectation is that the new framework will bring the country's public accounts, which are currently in the red, into balance. In addition to improving the conditions for socioeconomic growth, the new fiscal framework is expected to bring greater credibility and legal certainty to Brazil.
According to Haddad, by controlling the lack of control over public spending and reducing the primary deficit, the government is creating a more favorable economic environment for private sector investors . This is one of the government's biggest challenges, since the market has shown itself to be insecure regarding the country's financial instability.
And, as a way of benefiting society, it is also expected that the new fiscal framework will provide conditions for the government to direct resources to public policies that already exist, and enable the creation of new programs.
The new fiscal framework in Congress
After approving the proposal with President Lula, Haddad met with members of parliament and with Alexandre Padilha (PT), Minister of Institutional Relations. Padilha stated that the proposal should be well received in both Houses, increasing the government's expectations for a quick process.
In the view of some experts in the area of ​​political science, getting the new fiscal framework approved could be the first major challenge for the Lula government in relation to the National Congress .
This is because, in addition to the consideration of a new set of fiscal rules, another important issue must be evaluated by parliamentarians: Tax Reform . The proposal to modernize the national tax system could also have a direct impact on the public accounts of the Union, and will therefore require strong action from the political base of the Lula government.
In practice, what the government needs to balance its revenues and expenditures is to predict how much it will cost to finance public services , while at the same time keeping the country's debt under control.
According to the text presented, the main points of the proposal address issues such as:
The promise to eliminate the primary deficit in 2024, with a surplus of 0.5% of GDP in 2025 and 1% in 2026;
The limit on growth in federal spending is 70% of the change in revenue over the previous 12 months (spending must grow less than revenue);
The forecast of a floor and a ceiling for the growth of primary usa mobile database expenditure, with ranges between 0.6% and 2.5% of GDP per year.
The Finance Minister said the proposal is a combination of the best of the Budget Guidelines Law and the current spending cap, implemented under the government of former President Michel Temer. The combined rules show that the higher the GDP and revenue growth, the higher the public spending cap will be .
The expectation is that the new framework will bring the country's public accounts, which are currently in the red, into balance. In addition to improving the conditions for socioeconomic growth, the new fiscal framework is expected to bring greater credibility and legal certainty to Brazil.
According to Haddad, by controlling the lack of control over public spending and reducing the primary deficit, the government is creating a more favorable economic environment for private sector investors . This is one of the government's biggest challenges, since the market has shown itself to be insecure regarding the country's financial instability.
And, as a way of benefiting society, it is also expected that the new fiscal framework will provide conditions for the government to direct resources to public policies that already exist, and enable the creation of new programs.
The new fiscal framework in Congress
After approving the proposal with President Lula, Haddad met with members of parliament and with Alexandre Padilha (PT), Minister of Institutional Relations. Padilha stated that the proposal should be well received in both Houses, increasing the government's expectations for a quick process.
In the view of some experts in the area of ​​political science, getting the new fiscal framework approved could be the first major challenge for the Lula government in relation to the National Congress .
This is because, in addition to the consideration of a new set of fiscal rules, another important issue must be evaluated by parliamentarians: Tax Reform . The proposal to modernize the national tax system could also have a direct impact on the public accounts of the Union, and will therefore require strong action from the political base of the Lula government.