Delaying Public Sector Reforms: Post-Stabilization Fiscal Strains in Brazil

79 Pages Posted: 25 Apr 2011

See all articles by Rogerio L.F. Werneck

Rogerio L.F. Werneck

affiliation not provided to SSRN

Afonso S. Bevilaqua

Catholic University of Rio de Janeiro (PUC-Rio)

Date Written: January 1998

Abstract

Since the mid-1980s Brazil has experienced a period of great macroeconomic instability. Examining the evolution of the primary balance during these years, one identifies three markedly distinct periods: 1985 to 1989, 1990 to 1994, and 1995-96. The average primary surplus increased from 0. 6 percent of GDP in 1985-89, to 3. 1 percent in 1990-94, falling back to less than 0. 1 percent of GDP in 1995-96. The reduction in the operational deficit between 1985-89 and 1990-94 reached almost 5. 5 percent of GDP, with more than half of the improvement coming from falling interest payments. Between 1990-94 and 1995-96, the operational deficit widened by 4. 5 percent of GDP. Only less than a third of that variation may be attributed to rising interest payments. All the rest came from the vanishing primary surplus.

Suggested Citation

Werneck, Rogerio L.F. and Bevilaqua, Afonso S., Delaying Public Sector Reforms: Post-Stabilization Fiscal Strains in Brazil (January 1998). IDB Working Paper No. 89, Available at SSRN: https://ssrn.com/abstract=1818768 or http://dx.doi.org/10.2139/ssrn.1818768

Rogerio L.F. Werneck (Contact Author)

affiliation not provided to SSRN

No Address Available

Afonso S. Bevilaqua

Catholic University of Rio de Janeiro (PUC-Rio) ( email )

Rua Marquas de Sao Vicente, 225
RJ 22453-900 Rio de Janeiro, 22453-900
Brazil

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