Budget and Planning Minister Simone Tebet said on Wednesday that the National Congress had “refined” the text of the fiscal framework and said that the government’s signaling that the targets set in the law will be met will allow for a reduction in the base interest rate early in the second half of this year.
“We are confident that we will be able to meet next year’s fiscal target of zeroing the fiscal deficit so that we can provide legal certainty, predictability and stability and signal to the Central Bank … that we have fiscal responsibility,” Tebet told the journalists .
“With that, we have all the conditions to lower the interest rate in Brazil already in the second half of the year, more precisely in August,” he added.
The Selic rate is currently at 13.75% per annum, a level repeatedly criticized by the government of President Luiz Inácio Lula da Silva for considering it too high and harmful to economic growth.
Management members, including Tebet and Finance Minister Fernando Haddad, have argued that their efforts to tighten fiscal positions pave the way for monetary easing, although the central bank has reinforced the message that de-anchoring inflation justifies maintaining interest rates for the time being.
Tebet praised the rapporteur for the proposed new tax framework, Congressman Cláudio Cajado (PP-BA), saying that the National Congress, especially the Chamber of Deputies, had “refined” the text, which is expected to be voted on on the 24th.
Source: Terra
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