The financial market is closely monitoring the upcoming decisions regarding the economic plan for the next mandate and the selection of the new Finance Minister. According to Claudio Frischtak, simply announcing a name without a clear and consistent economic program is insufficient to transmit confidence to economic agents. In an interview with CNN Money, Frischtak highlighted that two interconnected issues are at stake: the chosen individual and the program they will present.
Frischtak stated that a name alone does not work well without a credible program, nor is it enough to announce a plan supported by individuals who have never believed in those proposals. He positively evaluated two names currently under consideration. The first is Rafael Fonteles, the re-elected governor of Piauí, who served as Finance Secretary for seven years and Governor for over four years, securing re-election with approximately 71% of the vote. The second candidate mentioned is Vice President Geraldo Alckmin, described as historically responsible, having served two terms as governor of São Paulo and understanding the importance of public account adjustments.
Frischtak noted that either name would be well-received provided it is accompanied by a credible program and explicit support from the president. The analyst emphasized that the new government must publicly present a plan to improve the quality of public accounts. He clarified that an immediate adjustment within a few months is not necessary; rather, a monitorable and credible "flight plan" is required to track fiscal evolution every semester.
Among possible measures, Frischtak mentioned reviewing tax incentives, which currently represent about 6% of GDP. He suggested it would be viable to reduce this percentage to between 3.5% and 4% over four years, with an annual reduction of approximately 0.6% of GDP. Additionally, he cited the need to rethink the design of the Bolsa Família program and combat waste in parliamentary amendments, without removing the minimum necessary for the most vulnerable population.
Regarding the political context, Frischtak stressed that in a presidentialist regime, the president's word and attitude are decisive. He argued that the president must explicitly state trust in the new minister and commit to adjusting accounts. A program supported by the president, their party, and their coalition could also gain opposition support and be refined through the democratic process.
On the subject of interest rates, Frischtak assessed that the Central Bank should maintain the basic rate at current levels due to existing fiscal uncertainties. He pointed out that high real interest rates are not the responsibility of the monetary authority but reflect structural weaknesses in the Brazilian economy. Warning that one cannot play games with inflation, he recalled that Brazil has previously faced daily inflation rates of 1% to 1.5%, a situation that particularly impoverishes the most vulnerable segments of society.
Sources: CNN Brasil.