IMF is willing to help Brazil in the debate on the new fiscal framework

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The International Monetary Fund (IMF) made itself available to contribute to the debate on the country’s new fiscal framework. The information was given by the Minister of Finance, Fernando Haddad, after a meeting with the general director of the fund, Kristalina Georgieva, held yesterday (17). According to the minister, the institution was willing to deploy a technical team to present the rules currently in force in different countries and the IMF’s opinion “on those that are working and those that are not.”

Haddad also said that the Inter-American Development Bank (IDB) also expressed its intention to contribute to the debate.

“The IDB also made itself available. Many Brazilian economists, the university and specialists will be asked to give their opinion on this”, he said.

Yesterday (17), the minister said that he intends to submit the proposal for the new fiscal anchor to the National Congress by the month of April. The proposal should replace the current spending cap rule, approved in 2016.

The spending ceiling provides for a growth limit for federal government spending in 20 years, from 2017 to 2036. Total spending by the Union as of 2016 is now corrected by official inflation, the Extended Consumer Price Index (IPCA) .

The proposal for a new fiscal anchor is provided for in the Constitutional Amendment of the Transition, which determines that the government must submit a complementary bill to the National Congress by August.

Currently, the spending cap is one of three fiscal rules that the government must obey. It aims to prevent the lack of control of public accounts. The others are the primary result target – deficit or surplus -, established in the Budget Guidelines Law for each year, and the golden rule, instituted by Article 167 of the Constitution and which obliges the government to request, in some cases, authorization from the Congress to issue government bonds.

Translated to english by RJ983

From Brazil, by EBC News

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