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Brazil minister says spending, retirement reforms crucial

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Staff Writer | October 31, 2016
Brazil must push ahead with reforms, including a proposed cap on government spending and an overhaul of social security rules, to restore long-term order to public finances in Latin America's biggest economy.
Henrique Meirelles
LatAm   In the Folha de Sao Paulo
Finance Minister Henrique Meirelles, in an interview with the Folha de Sao Paulo, said he was confident that Brazil's Senate would soon follow the lower house of Congress in approving the proposed ceiling.

The measure, meant to rebalance public finances after years of heavy spending that led to a government deficit equal to about 10 percent of Brazil's economy, is the first of several that President Michel Temer hopes will promote investment and help restore confidence and return Brazil to growth after two years of recession.

Meirelles, who assumed the Finance Ministry earlier this year when Temer took over for impeached former President Dilma Rousseff, told Folha that additional measures, especially a reform of Brazil's costly social security program, will be necessary to help the spending cap make any difference.

Without changes to existing retirement laws, he said, Brazil would have to increase already onerous tax levels to keep financing social security payments. "It would mean a tax increase because the bill would have to paid," Meirelles said.