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An essential element of the Bolsonaro government's plan to reduce the budget deficit as early as 2019 is the implementation of structural reforms, including the adoption of an in-depth reform of the social Security. The statement was made by the Minister of the Economy, Paulo Guedes in Davos, Switzerland, during an interview granted to Bloomberg on Wednesday 23 [19659002"Morethanhalf budget deficit ) will be resolved with pension reform, this is the number one priority," said Guedes. The minister explained that less than 11 percent of the country's population was retired, but the system "is already down." "We need to repair the old system and introduce a new system, moving to the capitalization model," he explained.
At the end of the interview, Guedes emphasized the importance of rapid implementation of structural reforms. "The urgency lies in the structural reforms, we want to give more importance to the reform as quickly as possible, namely the reform of social security," said the Minister of Economy.
Zerar deficit
Paulo Guedes reaffirmed his intention to eliminate the government's primary deficit of 139 billion rubles this year. According to him, the economic team counts for at least 20 billion dollars of privatizations, refunds of resources by the National Bank of economic and social development (BNDES) and reduction of subsidies. "In terms of cash, we will eliminate the deficit this year," he said.
Guedes said the government intended to sell public companies and subsidiaries of "two or three large state-owned companies". He further recalled that the subsidies paid by the government today amount to about 100 billion dollars. "If we cut 10%, we already have $ 10 billion," he said, pointing out that it was a reduction that was difficult for the government to bear. political wear. "Why go into little battles if we have a big, big fight in front of us?", He said, referring to the pension reform.
Guedes recalled that the promise to reduce the deficit to zero is achievable for this year. The problem, he said, is the coming years, because a portion of the government's revenue for this year is extraordinary, that is to say that they only enter the government. 2019 money: "It will take further structural reforms, such as social security".
The Minister announced his intention to "reduce the weight" of the state's balance sheet and stated that "the Union lent money to state and local enterprises. now wants to get it back. " He cited the case of BNDES, which had received from the Union contributions of 500 billion rubles, linked to previous subsidies, and which are now returned to the government.
Support
The minister also said that President Jair Bolsonaro was elected because of the liberal economic agenda proposed during the campaign. "We are moving towards a market-driven, privatized and market-friendly economy, and we will privatize and integrate the economy with the rest of the world," the minister said. "( On the Agenda ) We are 40 or 45 years behind other countries."
Guedes also attributed the election of Bolsonaro to conservative, center and center-right forces.
The minister also said that since the new democratization of the country, Brazil has adopted a social democratic policy. Shortly after the elections, he described the economic model as "bad".
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