Brazil pension reform will tackle deficit, not growth
Thursday, August 8, 2019
Significance
The government estimates that the reform will save 914.3 billion reais (231.3 billion dollars at the current exchange rate) over ten years. An additional 19.2 billion reais could flow to the system from a tax increase on banks. The Senate, which must also vote on the constitutional amendment, is expected to support it.
Impacts
- The government’s wider economic agenda could still be damaged by its frequent political blunders.
- Congress is gaining leverage and agenda-setting powers.
- House Speaker Rodrigo Maia is consolidating himself as a key name on the moderate centre-right.
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