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With No Debt Ceiling, Brazil Will See Higher Taxes, Finance Minister Says

07/25/2016 - 11h07

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MARIA CRISTINA FRIAS
FOLHA COLUMNIST

VALDO CRUZ
FROM BRASÍLIA

Finance Minister Henrique Meirelles, told Folha that, if Congress does not approve the proposal for the creation of a ceiling for public spending, the country will have chosen a worrisome path, and will have a price to pay, which he explains as new rounds of tax increases and higher interest rates for longer periods, which will delay growth.

"Brazil will have opted for a choice that I see as wrong and grave, one where the evolution of public debt is not managed, and the country will have to pay a large price for this over the next few years", he said, while expressing his support for the approval of the constitutional amendment that would limit increases to public spending to the correction of inflation observed from the previous year.

"If it's not approved, there will be no other out, because over the next few years, the only way to finance the increases in public spending will be to raise taxes", he said.

The minister said that he will meet the goal of closing the year with a deficit of R$ 170.5 billion (US$ 51.6 billion), despite the high spending and falling revenues that led the government to adjust projections last week.

Central Bank President during former president Luiz Inácio Lula da Silva's administration, Meirelles did not want to comment on President Dilma Rousseff's impeachment process, but he said the end it brings to the "uncertainty" will lead to a "greater and quicker recovery" for the economy.

Translated by SUGHEY RAMIREZ

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