Brazil’s Finance Minister Fernando Haddad believes a recession is unnecessary for lowering inflation. He emphasizes potential economic growth without excessive consumer price increases while acknowledging the central bank’s role in controlling inflation. Recent data shows inflation above the target, with measures being taken by the government to achieve fiscal targets.
Fernando Haddad, Brazil’s Finance Minister, recently stated that a recession is not a prerequisite for reducing inflation in the nation. He emphasized the potential for continued economic growth without excessive increases in consumer prices. Haddad noted that the central bank must act promptly to control inflation, following the decision to increase the benchmark interest rate by 100 basis points, thus raising it to 14.25%.
In a radio interview, Haddad expressed confidence in the central bank’s ability to manage inflation, stating, “We want inflation to remain increasingly under control.” He mentioned that when inflation exceeds the target range, it is essential for the central bank to intervene to bring it back to the predetermined level established with the National Monetary Council.
Recent data indicates that consumer prices rose by 5.06% in the year leading up to February, surpassing the official target of 3% with a tolerance of 1.5 percentage points. The central bank has forecasted further rate hikes, anticipating inflation rates of 5.1% for 2025 and 3.9% by the third quarter of 2026.
Haddad acknowledges the challenge of meeting fiscal and inflation targets while emphasizing the government’s commitment to achieving these objectives. The administration is targeting a zero primary deficit this year, with Congress considering a budget bill that could result in a projected surplus of 15 billion reais, with a vote anticipated soon.
In conclusion, Finance Minister Fernando Haddad asserts that economic growth does not need to stall to manage inflation effectively in Brazil. The government remains committed to controlling inflation through appropriate monetary policy while also striving to meet ambitious fiscal targets. This dual approach aims to ensure economic stability and growth moving forward.
Original Source: www.tradingview.com
