Fiscal adjustment is a condition for resuming growth, recommends Ipea

The Institute for Applied Economic Research (Ipea) recommended a greater balance in the fiscal situation, with a primary surplus of 1,2% of the Gross Domestic Product (GDP) in 2015, and an effort towards convergence, albeit gradual, with the inflation target. 4,5%. These suggestions are contained in the Institution's Situation Letter, released on Thursday. For Ipea, only with the correction of the current macroeconomic imbalances will a resumption of growth be possible.

The year 2014 ends with a complex picture, combining stagnation in economic activity with persistent inflation and a gradual increase in the external deficit, in addition to the significant worsening of public accounts.

At the same time, although it notes that the labor market has historically low unemployment rates, Ipea notes that this year was marked by the slowdown in the creation of new jobs, a situation that until now has been offset by the reduction of the economically active population.

Source: UOL ECONOMY (18/12)

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