With GDP on the rise, Paulo Guedes talks about ‘extending the state of calamity’ – 09/01/2022

If you’re following the news and aren’t confused by what you’re seeing, you’re not paying enough attention. At the moment, the government makes two contradictory moves. In one, the authorities beat the GDP drum. The index that measures national wealth grew by 1.2% in the second quarter of the year. Good news. In another move, Planalto sent Congress a budget proposal for 2023 that turns Bolsonaro and his rivals into presidential candidates without funds. Disturbing news.

On the one hand, the economic recovery. On the other, the recognition of fiscal ruin. The economy grows driven by the cooling of the pandemic and the electoral stimuli that sprinkled money into the atmosphere: release of the FGTS withdrawal, anticipation of the 13th of retirees, tax reduction, drop in fuel and energy prices, fattening social benefits.

The budget proposal throws buckets of cold water on the economic turmoil. The cooling sensation climbs the headlines before deflation hits the price of food.

According to the Budget project prepared by Paulo Guedes’ team, the Auxílio Brasil of R$600 will return to the level of R$400 as of January. At the turn of the year, add the double gas voucher and the R$ 1,000 Pix for taxi drivers and truck drivers. No sign of the correction of the Income Tax table. The minimum wage will remain without real adjustment for the fourth consecutive year. The nod of readjustments greater than 20% for civil servants drops to 4.85%.

Just like Bolsonaro, all candidates are waving at the maintenance of vitamin-enriched social benefits next year. It remains unclear where the money will come from.

This Thursday, hours after the announcement of the increase in GDP, Paulo Guedes said strange things in an interview in Rio de Janeiro. “If the war in Ukraine continues, extend the state of calamity and pay the R$600”, said the Minister of Economy. Once the war is over, it will be necessary to pass a tax reform, he added.

It is the first time in history that a minister defends the reelection of the chief so that the “state of calamity” is maintained after the polls open. Again: If you’re not confused, you might want to pay more attention.

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