Lula da Silva’s actions frustrate financial market expectations
Two weeks into office, President Luiz Inácio Lula da Silva has already frustrated the expectations of economists and the financial market, assessed economist and former finance minister Mailson da Nóbrega.
“From the most recent statements, including the economic part of the inauguration speech, Lula is approaching the period of Dilma”, he said, this Monday, 16th, in an interview with the newspaper Correio Braziliense.
According to him, economists expected that Lula da Silva’s third term would be a repetition of the first, but that is not what Nóbrega has seen so far.
The former minister pointed out the PT’s interventionist speeches and a mistaken perception of the role of state-owned companies in the Brazilian economic scenario.
“It is the period of the new economic matrix, pedaling, fiscal expansion and a return to protectionist views in the economy”, he warned.
Nóbrega pointed out that Lula da Silva has not yet realized the challenge that lies ahead.
“His speech seems to signal that it is enough to have reached the government to overcome a transformation”, he indicated.
“There will be money for everyone, to re-equip the Armed Forces, there will be steak for the poor. This speech by the president, somewhat boastful, influenced the speech of the ministers who took office,” he explained.
On spending in the current government, the economist warned of the risk of the country entering an explosive public debt trajectory.
“If you have a spending ceiling and mandatory expenses have a vegetative growth, discretionary expenses start to dwindle and money starts to run out for science and technology, for culture, for investments,” he said.
“But the speeches are as if it were a complete repeal of the spending ceiling and all past expenses are reestablished,” said Nóbrega.
“I would say that if the government does not get measures or formulations that generate a credible fiscal year, we will be in for a complicated situation. Because this will generate a drop in confidence, which means exchange rate depreciation and an increase in future interest rates. It means less growth and more inflation,” he concluded.
With information from Revista Oeste
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