Moro: Brazil is entering a negative economic outlook spiral

The presidential candidate Sergio Moro (Podemos) said in a lecture presented this Tuesday, 11, that the Brazilian economy “is not doing well” and that it does not have good prognosis. At the Money Week event, organized by EQI, Empiricus and other partners, the former judge stressed that the president Jair Bolsonaro (PL) and the former president Luiz Inácio Lula da Silva (PT) are “very bad” names for the market.

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According to Moro, the prognosis is of stagnation or even recession, “all this very much caused by the loss of fiscal credibility of the federal government’s policy”, he observed. payment of Auxílio Brasil, allowed the increase of funds for rapporteur amendments, also known as secret budget.

“The increase in the benefit (Auxílio Brasil) is necessary, but together with the PEC, expenses of dubious necessity are being increased at the moment. An example is the increase in budget space for the so-called amendments of the rapporteur”, pointed out Moro. For him, the problem is the lack of transparency in transfers, in addition to resulting in “spreading public investments”.

The PEC dos Precatórios, added the former Minister of Justice of the Bolsonaro government, “leads to the end of the spending ceiling or a reformation of the ceiling, which puts the government’s fiscal credibility in check”. The result is increased inflation and flight of investors, “who are in doubt about the government’s future ability to honor its commitments.”

“With rising inflation and negative investor perception, the Central Bank is forced to raise interest rates, which also generates an increase in public debt charges. In other words, it also withdraws resources from the budget to honor the debt,” said Moro. “This ends up generating a vicious cycle, because it also affects the private sector. We are entering a negative spiral in our economic prospects,” he said.

For Moro, the realistic picture shows that “the prospects and forecasts are not favorable”. The situation should also lead to a reduction in the salary mass and further depreciation of the real against the dollar, which generates distortions in the economy. “The scenario is not good, it is not positive, and this scenario ends up being even more negative due to the electoral perspective of next year”, he said.

elections

Moro said that the two options put forward today for the presidency of the Republic, Bolsonaro and Lula, are “very bad” and affect economic prospects. The first would be the continuity of a “government that has no project for the country” and that has “contradicted promises of fiscal stability and a gradual reduction of the public debt”. Lula, on the other hand, represents a government that “did not end well”.

“At the end of that government (Lula) we had the great recession of the years 2014 to 2016”, recalled the former judge. He pointed out that the recession took place during Dilma Rousseff’s government, but pointed out that the “seed of this recession” was generated even during the Lula government, through the adoption of the new economic matrix.

In the former minister’s view, economic prospects may improve if other electoral alternatives grow, “with more responsible economic policies, more based on science and avoiding misguided ideologies or populist appeals”. He pointed out that, as the market anticipates positive expectations, the environment could improve as early as 2022, if there are signs of an economically responsible government.

privatizations

Moro said he believes in the free market and is in favor of privatization, without mentioning companies. “The countries that have prospered are those that bet on growth based on private investment”, he pointed out. According to him, public investment plays an important role, but it is not possible to base a country’s prosperity on the public sector.

“We want to deepen the privatization flag,” said Moro. The presence of the State, according to him, is necessary in areas such as education, health and public security, with the objective of universalizing services, but in other areas it is possible to reduce it. The result, according to him, would be “increased efficiency in the economy, as this role is transferred to the private sector”.

Moro defended a consistent model of privatization. “It’s no use doing something badly done, as the federal government did in the privatization of Eletrobras”, he criticized, citing the “true tortoises” included in the proposal. “I am in favor of privatization, what we have to evaluate is the model, what and how we are going to privatize, so as not to eventually transform a public monopoly into a private monopoly.”

poverty eradication

Moro also once again defended the creation of a national agency, a kind of task force, focused on the eradication of poverty. “We need to have special programs aimed at eliminating poverty, something we should have done a long time ago and we are still skating in this area,” he said.

The former minister said he was in favor of cash transfer programs, but said that they are not enough to allow people to escape the “poverty trap”. Therefore, it is necessary to guarantee specific assistance to families, individuals and communities victimized by poverty.

“What we were considering is the formation of a kind of poverty eradication task force, with a national agency. The proposal would be the creation of an agency, with a specific mission that would allow a transversal action, using the capacity of several ministries to face it”, said Moro.

According to him, the proposal does not necessarily involve carrying out new public tenders and increasing state bureaucracy. “Our idea is to use the best we have within the public service, the various ministries and existing bodies”, he explained. “It’s difficult, it’s complex. This governance still needs to be built”, he observed.

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