Brazil: The cost of delaying fiscal consolidation

ABSTRACT In the present situation, the debt/GDP ratio in Brazil is increasing both due to the payment of interests and to a positive primary deficit. The later the fiscal adjustment is done, the higher must be the reduction of the primary deficit to attain long-run debt sustainability. This work makes the deduction of the cost of delay explicit and uses it to derive some data concerning the present Brazilian case. It considers three different scenarios and a two-and-a-half year period starting in June of 2016. The cost of delaying the adjustment is measured in terms of the additional reduction of the primary deficit relative to that which would have been necessary had the sustainability condition been met in June of 2016. Depending upon the scenario and on the concept of debt, a one year delay may demand between 0.14% and 0.67% of GDP of additional reduction of the primary deficit. The inertia may also lead to more uncomfortable figures, in case the average yearly periodic real interest rate as of June 2016 exceeds 6.6%. Or if average GDP yearly growth is lower than -1.6% in the period considered.

摘要：当前，巴西债务与国内生产总值（Gross Domestic Product，简称GDP）的比值持续攀升，这一现象由利息支出与初级财政赤字（primary deficit）双正两项因素共同导致。财政调整实施越滞后，为实现长期债务可持续性（debt sustainability）所需的初级财政赤字削减幅度就越大。本研究明确推导了延迟调整的成本，并基于该推导结果针对当前巴西的情况得出相关数据。研究考量了三种不同情景，以及以2016年6月为起点的两年半观测周期。延迟调整的成本，以相较于2016年6月即满足可持续性条件时本应实施的初级财政赤字削减幅度的额外削减量来衡量。根据不同情景与债务口径的差异，延迟一年调整所需额外削减的初级财政赤字占GDP的比例可介于0.14%至0.67%之间。若以2016年6月为基准的年均周期实际利率超过6.6%，或是在所考量时段内GDP年均增速低于-1.6%，则财政惰性还将导致更为严峻的相关数值。