Finance Minister Fernando Addad (PT) once again defended the reduction in Selic, the basic interest rate for the Brazilian economy, currently at 15% per year. In an interview in São Paulo this Monday (10/11), the head of the economic team reiterated that, in his opinion, the conditions are already in place for the Central Bank (BC) to lower Selic.
At the last meeting of B.C.’s Monetary Policy Committee (Copom) last week, monetary authorities left interest rates unchanged at 15 per cent a year. Brazil has the fourth highest nominal interest rate in the world and second in the world ranking of real interest rates (nominal interest rates that take into account inflation).
In an interview with CNN Brazil, Haddad was asked if he was “disappointed” in the work of BC President Gabriel Garipolo, the top official in BC. The head of the economic team praised Garipolo, who served as secretary-general of the Ministry of Finance before being appointed BC chief.
“I’m not going to use that word, because I have a very close relationship with Mr. Gabriel. Mr. Gabriel is my secretary general and was appointed to the BC by me. I believe he is doing a good job as head of the BC. He inherited a series of problems in the financial markets,” Haddad said.
“BC is more than Selic, there are many other things at play. What I can say is that I think there is room for interest rates, and my opinion is, everyone knows, to be lower. And this is not a personal issue. It is a systemic issue,” the minister continued, once again defending the rate cut.
“People express their opinions, so do the financial markets, the productive sectors, the political class, analysts…but it is BC who decides.”
Please also read
-
work
Ibo Vespa reached 155,000 points for the first time in history. dollar retreats
-
sao paulo
Haddad cries at wake, highlighting late PT founder’s resilience
-
work
Haddad cancels plans in Belem and attends Frateski’s wake in SP
-
economy
Haddad celebrates IR exemption approval: ‘Economy moves forward’
“Some of these players agree that it’s probably time to start a Selic reduction cycle,” Haddad said. “When and how to start is up for debate. But no one should be worried about honest debate on these issues. No one wants anything other than the country’s interests,” he said.
Mr. Haddad once again enumerated some of the achievements of President Luiz Inacio Lula da Silva’s (PT) government in the economic field.
“We are celebrating a series of economic indicators for our country. This will be the highest average economic growth rate since 2010, the lowest inflation rate accumulated over four years in Brazil’s history, the lowest inequality index in the history of our country, the lowest unemployment rate in the IBGE historical series, and the best major result accumulated since 2015,” the minister said.
“The world is not in a simple situation. Here we see our neighbors, Argentina, Venezuela. If you take Europe, it has slowed down sharply. U.S. tariffs and government difficulties (by donald) Trump. “But we have a situation in which Brazil can continue to do what it needs to do effectively and create an economic environment that is very favorable for investment,” he added.
tax issues
In addition to interest rates, Fernando Haddad was asked about domestic fiscal issues and said the Brazilian government has achieved its goals and is fiscally responsible.
“The country’s fiscal situation has been much worse in recent times, under the Temer government and under the Bolsonaro government. Look at the country’s fiscal data. The primary budget deficit was about 2% of GDP. Today we are talking about balancing the public account with a small surplus next year. The country’s fiscal situation has changed for the better,” Haddad said.
“We are going to effectively liquidate the Payroll Protection Fund. We are going to pay 100% of the fan debt, which is an expense contracted under the previous government with no funding source. We are normalizing the BPC curve (Recurring payment benefits) This is also an amendment to the law in 2021, making the eligibility criteria more flexible,” the Minister continued.
Haddad said Lula’s government faces “some very serious problems inherited from the previous government” and that we have consistently succeeded in resolving them. “We were able to deal with a legacy that was very complex to manage,” he concluded.
About The Author
