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Economy Minister Paulo Guedes said on Saturday (9) that it would be a mistake not to veto part of the project to help states that release salary increases for public servants.
The initial version of the project that allocates financial aid from the Union to the states and municipalities due to the coronavirus crisis counteracts the freezing of the salaries of officials. During the process in Congress, however, MPs included in text categories that could be readjusted.
The bill was approved on Wednesday (6) by the Senate and was sanctioned by President Jair Bolsonaro. On Thursday (7), Bolsonaro said he would veto the possibility of a salary increase.
“It would be a serious mistake to take the resources that would be destined to the health of Brazilians and try to divert this towards increases in functionalism and the machine,” said Guedes during a concert promoted by Banco Itaú.
Bolsonaro says he will veto the readjustment of the server if Paulo Guedes considers it necessary
In the minister’s evaluation, a possible increase in the salaries of public officials “would be the condemnation of Brazil” to the increase in interest and taxes and low growth.
Guedes also stated that Brazil’s Gross Domestic Product (GDP) is on a path of sharp decline with the impacts caused by the coronavirus crisis. According to him, despite the weakness of activity, the country is managing to “maintain the preservation of vital signs” of the economy and the recovery should accelerate with the end of the pandemic.
“The GDP is falling and it is falling sharply. We are managing to maintain the preservation of vital signs (of the economy),” said Guedes. “Our (most likely) opportunity is for a recovery in V.”
In recent days, several published indicators have indicated that the coronavirus crisis has been more intense than expected. Industrial production for March, for example, it fell 9.1% compared to February, according to the Brazilian Institute of Geography and Statistics (IBGE). It was the worst performance of the month since 2002, when the historical series began.
- Vehicle production in Brazil plummets 99% in April, says Anfavea
Analysts consulted by the Central Bank’s Focus report have lowered GDP performance forecasts weekly. In the last reading, the forecast was that a recession of almost 4% would fall this year.
In the evaluation by the Minister of Economy, the country will resume economic growth with the combination of low interest rates (the BC reduced the Selic rate to 3% this week), the return on investment and the control of public accounts.
The government, according to Guedes, will not increase the country’s tax burden, even with the expectation of a larger public deficit to contain the effects of the pandemic on the economy.
The National Treasury Secretariat has already estimated that the gap in the consolidated accounts of the public sector (government, states, municipalities and state companies) should approach R $ 600 billion this year, which is equivalent to around 8% of the Internal Product Gross (GDP))
“There will be no tax increase, it will not be in our government,” said Guedes.
