{
  "title": "Fiscal Policy and Debt Sustainability: Cardoso's Brazil, 1995-2002",
  "publication": "IMF Working Papers, August 1, 2004",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/fiscal-policy-and-debt-sustainability-cardoso-s-brazil-1995-2002-17462",
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  "summary": "We look into Brazil's public sector accounts during the two administrations of President Fernando Henrique Cardoso: 1995-98 and 1998-2002.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- Analysis of Brazil's public sector accounts during the two administrations of President Fernando Henrique Cardoso: 1995-98 and 1998-2002.\n- Emphasis that the authorities' attitude was as important as the pace of structural reforms for understanding public sector debt and deficit dynamics.\n- Characterization:\n  - The high deficit of the first administration (1995-98) resulted from an expansionary policy.\n  - The adjustment of 1999 is presented as proof of a commitment to fiscal rigor and the need to finance public spending adequately.\n- The fiscal adjustment over the period was achieved entirely through increased revenues, while federal primary public expenditure grew in real terms during the eight years of the two administrations."
    },
    {
      "heading": "Key findings",
      "content": "- Principal drivers of fiscal outcomes:\n  - The principal cause of the fiscal deterioration in the first Cardoso administration was the deterioration in the primary balance rather than the increase in the interest payments on public debt.\n  - The fiscal adjustment was entirely on account of increased revenues.\n- Timing and policy posture:\n  - Expansionary policy characterized 1995-98.\n  - Austerity/adjustment begins in 1999, signaling a shift toward fiscal rigor.\n- Expenditure behavior:\n  - Federal primary public expenditure grew in real terms during the eight years covered (1995-2002)."
    },
    {
      "heading": "Analysis and outlook on sustainability",
      "content": "- The report considers the outlook for fiscal sustainability in Brazil over the Cardoso administrations.\n- It concludes that to preserve the hard-won fiscal discipline, the authorities' recent austere fiscal attitude should be permanently embedded into the fiscal institutions."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Permanently embed an austere fiscal attitude into fiscal institutions to preserve fiscal discipline and debt sustainability.\n- Ensure that fiscal adjustments are supported by durable institutional changes rather than temporary policy stances."
    },
    {
      "heading": "Subjects and keywords",
      "content": "- Subject: Economic sectors, Expenditure, Fiscal policy, Fiscal stance, Public debt, Public sector\n- Keywords: authorities' effort, authorities' rhetoric, debt, debt sustainability, financial system, fiscal attitude, Fiscal policy, Fiscal stance, GDP deflator, government, government's attitude, institutions, part of the authorities, payroll spending, Public sector, real interest rate, real value, sc, WP\n\n---\n\n Content in this bundle\n\n- Wp04156\n  - Wp04156 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Wp04156 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/fiscal-policy-and-debt-sustainability-cardoso-s-brazil-1995-2002-17462"
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    "Published: August 1, 2004",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451857436.001",
    "Analysis of Brazil's public sector accounts during the two administrations of President Fernando Henrique Cardoso: 1995-98 and 1998-2002.",
    "Emphasis that the authorities' attitude was as important as the pace of structural reforms for understanding public sector debt and deficit dynamics.",
    "Characterization:",
    "The fiscal adjustment over the period was achieved entirely through increased revenues, while federal primary public expenditure grew in real terms during the eight years of the two administrations.",
    "Principal drivers of fiscal outcomes:",
    "Timing and policy posture:",
    "Expenditure behavior:",
    "The report considers the outlook for fiscal sustainability in Brazil over the Cardoso administrations.",
    "It concludes that to preserve the hard-won fiscal discipline, the authorities' recent austere fiscal attitude should be permanently embedded into the fiscal institutions.",
    "Permanently embed an austere fiscal attitude into fiscal institutions to preserve fiscal discipline and debt sustainability.",
    "Ensure that fiscal adjustments are supported by durable institutional changes rather than temporary policy stances.",
    "Subject: Economic sectors, Expenditure, Fiscal policy, Fiscal stance, Public debt, Public sector",
    "Keywords: authorities' effort, authorities' rhetoric, debt, debt sustainability, financial system, fiscal attitude, Fiscal policy, Fiscal stance, GDP deflator, government, government's attitude, institutions, part of the authorities, payroll spending, Public sector, real interest rate, real value, sc, WP",
    "**Wp04156**"
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