‘Where’s the big fiscal deterioration?’, says Campos Neto on debt

In a speech more aligned with the government, the president of the Central Bank, Roberto Campos Neto, argued that the current numbers do not show the deterioration of the fiscal scenario, repeating that there is a difference between a noisy perception and reality.

“Where’s the big fiscal deterioration? Figures don’t show that,” he said at a seminar at Febraban (Brazilian Federation of Banks) and the Sphere, in which the president of the Chamber, Arthur Lira (PP-AL), is also present.

Campos Neto cited the evolution of projections in the Focus Bulletin and said that estimates for gross debt have been improving since November 2020 and that, at this time, the projections are very similar to the scenario prior to the covid-19 pandemic.

For 2021, the projection is 81.5%, against 81% of the government’s estimate before the pandemic. For the primary result, the projection before the pandemic was of a deficit of 1% in 2021 and zero in 2022, “now it is 1.7% and 0.3%, 0.4%”, said Campos Neto.

The BC president even refuted the argument that the fiscal improvement is explained only by inflation. “Inflation has had its effect, but there are several effects that are important,” he said, citing the increased consumption of goods, which earn more, in the pandemic and in formal services online versus informal.

Campos Neto also said that there is noise in associating the electoral process with government measures, referring to criticism that the fund that would be created in the PEC of precatório would be used to expand the Bolsa Família. But he stated that the reality is that everything will be done within the fiscal responsibility regime.

“Part of the government’s communication could have been smoother. Understanding that there is noise in associating the electoral process with measures. But the country took structural measures in the pandemic when no one had done it, and within the fiscal responsibility regime,” added the president BC, noting that the commitment of Congress to the fiscal is important.