Despite a record-smashing GDP growth rate of 7.7 percent in the third quarter, the immediate future of the Brazilian economy remains uncertain. We are two weeks from the end of the legislative year and the 2021 budget has yet to be approved. Meanwhile, the government has been unable to propose a welfare program that would replace the coronavirus emergency salary — the massive stimulus program that prevented an even bigger economic downfall amid the pandemic.
Major signs of uncertainty can be gleaned from the recent public declarations of Economy Minister Paulo Guedes.
The Chicago School-educated libertarian is the administration’s ultimate austerity hawk, but even he has expressed his desire for a “flexible” primary deficit goal in 2021. Essentially, he wants to be able to change the deficit targets — initially set at BRL 139 billion, or USD 27 billion — as the government updates its revenue estimates.
The...
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