Lower interest rates, higher Economic Activity Index (IBC-Br) in the first quarter, and falling inflation rates are some of the signs indicating that the Brazilian economy could be climbing out of recession and treading towards stability. Recent political events, however, have cast a cloud of doubt over this prospect. Amidst this gloomy scenario, experts will gather on May 31, at 9 a.m., at the FGV Cultural Center in Botafogo, to discuss the next steps of the government and the “Fiscal policy challenges to resume growth”. The meeting will be hosted by FGV’s Brazilian Institute of Economics (IBRE) and feature the Brazilian Minister of Planning, Dyogo Oliveira.

The Minister will share the government’s standpoint regarding this issue, presenting the list of priorities for fiscal policy. A report on the state bankruptcy project developed by FGV researchers will also be presented during the meeting. According to economist Manoel Pires, researcher from IBRE’s Applied Economics area, the fiscal scenario requires a set of structural reforms to be deployed over the next few years – Brazil’s primary deficit currently accounts for 2.7% of the Gross Domestic Product.

“From a fiscal standpoint, a gradualism approach has been adopted. As Brazil manages to improve its accounts in the medium term, the government does not have to be tied to budget cuts that hinder economic recovery and cripple important public services. The strategy must be properly balanced, since sustainability is a long-term concept. Hence the importance of a Social Security reform,” he said.

Despite changes to the original retirement rules, Pires believes the new measures will yield positive results. The question is how to move forward with the reform in a wavering political environment. “From a technical point of view, the reform is positive. It should stabilize social security expenses over the next few years, and we will be able to analyze its impacts on income distribution and poverty indicators, in order to assess the situation and come up with new policies. The problem is how to pass this reform amidst such troubled conditions,” said the economist.

The meeting will also promote debate on other structural reforms, Brazil’s fiscal regulations, its macroeconomic impacts, and how to move forward with this agenda given the current political scenario, coordinating the recovery of economic growth and fiscal sustainability.

Go to the website for more information and to register.