Two-week quarantine in SP should generate loss of 500 mln to Paraná

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The state of São Paulo is the destination of 45% of all sales in the Parana. Any measure that the wealthiest state in Brazil takes to contain the pandemic of covid-19 it also affects the neighboring state. In the optimistic estimate of the Secretary of Finance and Revenue of Paraná, Renê de Oliveira Garcia Júnior, the two weeks in which São Paulo is in the strictest quarantine should generate a loss, alongside Paraná, of 500 million reais in collection.

In 2020 alone, with all the restrictions in the São Paulo economy, the loss caused by the decrease in sales volumes in Paraná totaled 1.5 billion reais, most of which in fuels. Even so, the state of the South managed to go against the fall of 4.1% of the Brazilian GDP, and to register a growth of 0.1% last year.

According to the secretary, in order to avoid a recession, the state government implemented a series of expenditure containment measures and, more recently, sanctioned two laws, that of Quality and Fiscal Responsibility and the State law of Economic Freedom. The objective is to guarantee fiscal balance, without compromising the state’s cash flow, and to stimulate business.

Another measure was to create the Tax Recovery and Stabilization Fund of Paraná, linked to the State Treasury Department, in order to mitigate the effects of economic recessions or fiscal imbalances and to provide resources for situations of public calamity.

Economist, dgrantor and master in economics from Fundação Getúlio Vargas (FGV), in Rio de Janeiro, Renê de Oliveira Garcia Júnior jhe was president of the Securities and Exchange Commission (CVM) and project coordinator of the Brazilian Institute of Economics. He took over the Secretary of Finance of Paraná two years ago and shortly after his first year in office came the biggest challenge: the covid-19 pandemic.

Defender of a liberal and minimal state, he believes that the role of a government is “not to disturb the economy”. He is eyeing the Administrative and Tax reforms, which are under way in the National Congress. See the main excerpts from the exclusive interview he gave to EXAM.

FAZENDA Two-week quarantine in SP should generate loss of 500 mln to Paraná Secretary of State for Finance of Paraná, Renê de Oliveira Garcia Junior.

Secretary of State for Finance of Paraná, Renê de Oliveira Garcia Junior. (Arnaldo Alves / Government of PR / Disclosure)

How did Paraná manage to go against Brazil and not go into recession?

This is related to two sectors that had a very good year and that are the basis of the economy of Paraná. Agribusiness broke a harvest record, and exports were also very good. The other was that right after the pandemic, industrial production dropped 27% in May, but it returned during the end of the second half of 2020, and was responsible for this resumption, mainly for the search for more qualified jobs. Paraná is the second state in generation of formal employment [saldo positivo de 52.670 em 2020], then it is the cooperation of these two sectors. The participation in the service sector is small, so the result was not bad.