Brazil’s Finance Minister Asserts Recession Not Essential for Inflation Control
Brazil’s Finance Minister Fernando Haddad stated that a recession is not required to reduce inflation. He highlighted the role of the central bank in controlling prices, with a recent interest rate hike to 14.25%. Haddad acknowledged the increasing inflation rate, which currently stands at 5.06%, and emphasized the government’s fiscal goals, including a shift towards a surplus budget. A vote on the revised budget is expected soon.
Brazil’s Finance Minister, Fernando Haddad, expressed confidence that a recession is unnecessary to reduce inflation in the country. He stated that the economy can continue to grow without spiraling consumer prices, emphasizing the importance of the central bank’s role in stabilizing inflation. Following a recent increase of 100 basis points, bringing the interest rate to 14.25%, Haddad reaffirmed that inflation must be contained to meet the agreed targets set with the National Monetary Council.
Haddad indicated that consumer prices had risen by 5.06% over the past twelve months, surpassing the official target of 3%, adjusted for a 1.5 percentage-point tolerance. The central bank has anticipated another interest rate hike in May and projected inflation rates of 5.1% for 2025 and 3.9% for the third quarter of 2026. These estimates are largely influenced by current monetary policy decisions.
Moreover, the Minister acknowledged the challenging nature of fiscal and inflation targets but underscored their significance. With a government intention to achieve a zero primary deficit this year, the budget bill’s sponsor in Congress has boosted the expected balance to a surplus of 15 billion reais. A vote on this revised budget is anticipated shortly, reinforcing the government’s commitment to fiscal responsibility.
In summary, Finance Minister Fernando Haddad asserts that Brazil can reduce inflation without entering a recession, as the economy can grow sustainably. He emphasizes the central bank’s responsibility in managing inflation and commits to reaching established fiscal targets, including a zero primary deficit. The government remains focused on stabilizing the economy while monitoring ongoing inflation rates and adjusting monetary policies as necessary.
Original Source: www.tradingview.com
