In his intervention, he pointed out that Social Security records a deficit of 404 billion reais, a figure he decided to highlight in a very strong warning within his report on the federal government's accountability.
The minister of the Federal Court of Accounts, Augusto Nardes, warned about the deficit and stated that "the national economy is collapsing"
In his intervention, he pointed out that Social Security records a deficit of 404 billion reais, a figure he decided to highlight in a very strong warning within his report on the federal government's accountability.
Augusto Nardes, minister of the Federal Court of Accounts (TCU) of Brazil, warned that the country could run out of sufficient resources to meet the payment of pensions and retirement benefits of the National Institute of Social Security (INSS), due to the enormous fiscal deficit of the socialist government of Lula da Silva.
In a video posted on his Instagram profile, the official questioned the evolution of Brazil's public debt, which rose from 72% to 83% of Gross Domestic Product (GDP) during the third term of the dictator. In this context, he issued a warning about the economic direction of the country: "The national economy is collapsing".
One of Nardes' main criticisms was directed at the management of public spending. He explained that Lula's administration deepened a process of "de-budgeting", a practice that consists of executing increasingly higher expenditures outside the General Budget.
According to the calculations presented by the minister, the expenditures not covered by the official budget already amount to 326 billion reais. This situation bears similarities to the fiscal maneuvers known as "fiscal pedaladas", which were at the center of the process that led to the impeachment of former president Dilma Rousseff in 2016.
"There was manipulation in the president's accounts then, and it is happening again", he stated. The official is closely familiar with that episode: he was the rapporteur of the TCU in the procedure that recommended rejecting Rousseff's government accounts.
However, the main concern expressed by Nardes is related to the Brazilian state's ability to sustain the pension system.
The minister also addressed directly those who expect to access a pension through the INSS and questioned the continuity of the system under the current situation.
"As things stand, there will be no pensions", he asserted. He then elaborated on his warning: "We no longer have enough savings even to pay today's retirees, let alone in the future".
The massive fiscal deficit and the lack of pension funding are the main economic challenges the country will face in the coming years.
For the vast majority of economists, the lack of a fiscal adjustment will generate a serious crisis, as the growth of mandatory spending threatens to absorb virtually all available resources in the budget.
In that scenario, the margin to finance investments and sustain the functioning of public administration would become increasingly limited.
