The Inheritance Keeps Getting Worse

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The Inheritance Keeps Getting Worse

Second week
September 2023

We don't know who is going to win the elections. But we do know that the legacy of problems for the next government has not stopped getting worse in recent weeks. This week's measures are more fuel for the fire. The fiscal deficit will be larger than expected and to make matters worse it will generate false rights for wealthy people who we do not know if they will understand that being from the richest 10% of the population they should be net payers of income tax. Our new accounting primary deficit number is 2.8%, but the well-accounted primary deficit is close to 4% of GDP. That is the minimum the next government should cut public spending from the federal government. Furthermore, Massa with this measure is close to evaporating (or at least reducing) the provincial surplus. This also reduces the next government's room for maneuver.