According to the minister, the fate of Selic will be strongly influenced by the external interest rate scenario from the middle of the year, and Brazil has “all conditions to grow by more than 2%” in 2024
BRASILIA-IL Minister of Finance, Fernando Haddadstated on Tuesday 30th, that the result of the public debt in 2023 is a consequence of the primary deficit and commissions. He also talked about the Court orders paid overtime in 2023in the order of almost R$ 95 billion, and which generated an impact of almost 1 percentage point on the primary result – and added that the government cannot be held responsible for payment of a default.
“It was the first time in history that the government defaulted. The debt already existed, the court orders already existed and they were not paid in accordance with the Constitution. The Federal Court declared the extension until 2027 illegal. The government agreed with the ruling and paid a default. A government that pays a default cannot be held responsible either for the default or for the increase in debt resulting from the payment,” he said.
He stated once again that the government is bringing order and ensuring transparency to the problems inherited in 2022. The statements were made after the minister returned from an agenda at the Palácio do Planalto, where the creation of a secretariat for organize COP-30, which will take place in Belém, Pará, next year.
Haddad said he believes the week will be “calm” regarding the Central Bank’s decision regarding the level of the Selic rate, as the monetary authority has a “relatively tight” agenda.
He also said that the expected start of the interest rate reduction cycle abroad, expected in the first half of the year, could lead Brazil to reach a terminal interest rate “beyond” what is currently expected, considering that this is still “speculation”. On the eve of the meeting of Monetary Policy Committee (Copom) From Central bankthe market maintained the median Focus market ratio for Selic at 9% per year at the end of 2024.
“From everything I’ve heard, in the travels I’ve done, it didn’t seem like the most likely thing (what a round of cuts starting in March), but in the first half it seems realistic to me. If that happens, it will be very positive for the Central Bank, because then the horizon could change relatively for the better, and this could project a terminal interest rate in this cutting cycle beyond what we imagine today. But these are speculations, we will evaluate them,” Haddad said.
Last month, Copom cut the Selic rate for the fourth consecutive time by 0.50 percentage points, to 11.75% per annum. The board preached caution and argued that the 0.50 percentage point rate cut continues to be the most appropriate for upcoming meetings – plural. As Projeções Broadcast showed last week, the implementation of at least three new cuts of 0.50 percentage points in the Selic rate, in meetings from January to May, is the baseline scenario for 56 of the 60 houses (93%) consulted.
This Tuesday Haddad strengthened his assessment that, starting from the middle of the year, the fate of Selic in the country will be strongly influenced by the external interest rate scenario. The minister’s expectation, for his part, is that the news is “good”. He also reiterated that he expects a “very good” year for the economy, which will exceed current forecasts, just as happened in 2023.
According to him, the government hopes to close 2024 with growth above 2%. “We understand that Brazil has all the conditions to grow more than 2% and we will take measures to make this happen,” he said. The projection of the Secretariat for Economic Policy of the Ministry of Finance is for a 2.2% increase in GDP. The International Monetary Fund (IMF), which updated its expectations on Tuesday, is aiming for more modest growth of 1.7%.
Haddad cited as an example the Guarantees Framework, which he said has the potential to change the credit standard in the country, which will stimulate growth. He also commented that the January data forecasts are quite reasonable, without specifying which numbers he was referring to.
“We entered the year confident that we could have a year above expectations, as happened in 2023?”, he reiterated.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
