Brazil’s new Finance Minister Fernando Haddad said on Monday he would propose a new fiscal anchor in the first half of this year as the administration of leftist President Luiz Inacio Lula da Silva works to “restore” public accounts.
A former mayor of Sao Paulo, Haddad took office with the challenge of presenting a credible fiscal framework after Congress passed a package increasing Brazil’s spending cap to ramp up social expenditures and meet Lula’s campaign promises.
In his first speech in office, Haddad said the government would not accept the “absurd” 220-billion-real ($41.19 billion) primary deficit forecast in this year’s budget, indicating it will work to reduce it.
He added he would work with “full emphasis” on the recovery of public accounts while fighting inflation, promising to send to Congress the proposal for a new fiscal anchor in the first half of the year seeking to ensure public debt sustainability.
Haddad did not mention Lula’s decision the day before to extend a costly tax exemption on fuels.