Criticism of Brazil's economic policy grows

 

In Brazil, there is growing criticism of the financial and economic policy of the government Rousseff. Your sleight be criticized. Thus runs Rousseff risk of losing their important pledge: confidence.Previously ignored the Brazilian government of President Dilma Rousseff all the critics who see their financial and economic policy as one of the reasons for the weak growth and stubbornly high inflation. But now, of any related, influential economist and former Economy Minister Antonio Delfim Netto has reported a word of criticism to which the government can not simply be dismissed as ideological. On the one hand sees net lack of trust between the government and the private sector as one of the reasons for the low rate of investment of 16% of gross domestic product (GDP).Surplus conjuredOn the other hand, he vehemently criticized the accounting gimmicks, Finance Minister Guido Mantega has the year's end quickly conjured a primary surplus. With the resulting loss of confidence in the ministry had achieved exactly the opposite of what it actually did, with an increase in the household want to achieve, said net. Because the primary surplus in the budget for more than a decade, one of the pillars of the Brazilian fiscal policy. Excluding interest payments must be at the end of the year - set by law - a surplus of 3.1% in relation to GDP are reported.This primary surplus guarantees that Brazil sovereign debt in the medium term decline. The primary surplus target dates back to the times when Brazil was considered a bad debtor. Using the instrument of statutory primary surplus has succeeded Brazil's public debt lower in ten years from 52% to 35% of its GDP. Brazil is a net borrower since 2008, because its foreign exchange reserves are greater than its liabilities. Therefore, Brazil is by the rating agencies now classified in five years as a good debtor ("Investment Rating").But since 2012, the government wanted to push the economy with tax cuts and government spending programs, in December, a gaping hole in the budget. With early dividends of state-owned banks such as Banco do Brasil and companies like Petrobras and remittances from the sovereign state funds resembled the Treasury from the budget. With this legal trick balance the government cut its fiscal credibility.

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