Cenários para as contas públicas: 1996/2002

Abstract

This paper develops a simple model for simulating the situation of the accounts of the public sector during the current and the next Administration (1995/98 and 1999-2002). The "other current and capital expenditures" - excluding transfers, expenditures with public employees and social security and the net payment of interests - is considered the adjustment variable of the model, based on assumptions regarding the results of the most important variables of revenue and expenditure and the Public Sector Borrowing Requirements (PSBR) in the operational concept. It is shown that those "other expenditures" will remain in a level similar to the current one in the next years, because the fall of the interests is going to be compensated by the reduction of the fiscal deficit and the increase in the payments related to the social security. The paper also calculates the results of the net public sector debt in some alternative scenarios and concludes that fiscal adjustment, privatization, a moderated monetization and GDP growth, can reduce the public debt/GDP ratio between 1996 and 2002.