Energy in Brazil: dark future
From what one reads about the Brazilian economy, the prevailing tendency is to maintain and even encourage "social programs" - subsidies for the low-income population.
The budget ceiling will again be breached (after all, that's what it exists for). Business as usual!
And so the most obvious result will be the increase in debt in relation to GDP.
The consequence that the economists point out is an increase in future inflation, and budgetary fragility,
And energy goes into this very package. Regulated tariffs increasing to cope with inflation and the list of energy related subsidies of all kinds that became part of the "institutional rule".
What should be done is a much needed cleanup of costs. The electricity sector should be super parsimonious with its spending so that tariffs would be lower as a result of responsible actions in the long term.
Rafael Herzberg
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Energy in Brazil: dark future
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