At the end of 2019, experts' forecasts for the economic scenario were relatively optimistic; especially regarding the reform agenda for this year. What they did not imagine was that something invisible would "disrupt" even the most accurate predictions.
According to economists, within the reform agenda, one of the most relevant from a fiscal perspective would be the Emergency PEC, which addresses the “cutting of public administration personnel expenses, which can be done through the suspension of hiring and public exams, reduction of working hours, reduction of salaries, and dismissal of non-tenured civil servants” and the Golden Rule PEC, which “prohibits the government from incurring debt to pay for current expenses, such as salaries, pensions, electricity bills, and other maintenance costs of public administration. The objective of the restriction is to prevent public debt from spiraling out of control.” which were expected to be unified at some point.
Another topic also considered a priority, still from a fiscal standpoint, was the administrative reform.
Tax reform was treated with less urgency because it involved conflicts of interest, but at this moment there may be pressure for it to enter the agenda as a higher priority as a contribution to curbing the current crisis, since it is directly linked to revenue. However, experts in the field are constantly meeting in virtual conferences to monitor measures to overcome the crisis and point out that the reform agenda tends to come to a halt, even if temporarily.
Microeconomic Reforms
There is still no decision on changes to the electoral calendar. As recently reported, the President of the Chamber of Deputies, Rodrigo Maia, believes that the focus should now be on managing the crisis caused by the Coronavirus pandemic. The legislative window, which was already short this year due to the electoral calendar, became even tighter due to the public health crisis, which impacted the economy. With an empty floor and committee discussions postponed, the reform agenda remains stalled.
Other reforms are in a different situation; the Sanitation reform, for example, may be voted on and approved later this year, despite the crisis; meanwhile, Eletrobras' reform is facing more difficulty progressing toward possible approval. The healthcare sector, which was previously seen as struggling to advance regarding a reform that regulates and makes health plans more flexible, is even more unpredictable given the current scenario.
The idea that the reform agenda will move forward—even if at a slow pace—according to a publication by InfoMoney, paints a picture that is difficult to predict right now. However, the perspective of experts is that Congress will put the agendas on "standby". The focus is now exclusively on actions, both economic and public health, to navigate the crisis created by the Coronavirus pandemic.
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