Planning and Budget Minister Simone Theve said this Wednesday (12th) that she believes the central bank will be able to lower the Selic rate by January next year and that inflation will fall to the center of its target in 2026.
“I am confident that the central bank has all the conditions to expect lower interest rates in Brazil going forward. If not at its next meeting, then I think it could happen at its meeting in January next year,” he said in an interview with CNN Brasil, citing improving economic indicators that would justify loosening monetary policy.
Asked about the possibility of hitting the midpoint of the 3% inflation target in 2026, Tebbett said his economic team believed it was achievable and that signs of the same were already starting to emerge from financial markets and BC itself.
“Next year’s inflation rate will definitely be lower than this year.”
Regarding fiscal performance, the minister ruled out changing the fiscal target for 2026, which currently stands at a surplus of 0.25% of GDP (with an acceptable range of around 0.25 percentage points), to make compliance more feasible, arguing that frequent changes would undermine the credibility of the targets pursued by the government.
He said that current fiscal rules are not sufficient to bring sustainability to public debt, but they are good rules to ensure stability, and he assured that the government will be able to reach its fiscal targets in 2026.
“We have to meet our fiscal targets and we cannot change them. We have to generate a surplus from next year onwards,” he said. “Next year we will achieve our goal with a surplus.”
Tebbett also said that a measure that could improve the government’s public accounting scenario is to increase the tax rate on betting. He said the increase, if approved, should give the economic team the power to comply with mandatory and discretionary spending and increase revenue so that there is no need to change fiscal targets for 2026.
Sen. Renan Carheiros (MDB-AL) introduced a bill last week proposing to double the rate charged by online gambling platforms from 12% to 24%.
About The Author
