Brazil’s Finance Minister, Fernando Haddad, believes a recession is not required to lower inflation, stressing ongoing economic growth. He confirmed the central bank’s commitment to managing inflation, especially after recent interest rate hikes. Consumer prices have exceeded targets, and the government aims for fiscal responsibility with a zero primary deficit this year and a potential surplus.
Brazil’s Finance Minister, Fernando Haddad, stated on Thursday that he believes a recession is not necessary to reduce inflation in the country. He emphasized that the economy could continue to grow without significant increases in consumer prices. Haddad acknowledged the central bank’s role in controlling inflation, particularly after the recent three consecutive hikes to the benchmark interest rate, which now stands at 14.25%.
In a radio interview, Haddad insisted on the importance of controlling inflation, noting that when it surpasses the target range, the central bank must intervene to restore it. “I fully believe the central bank team will do its job properly to rein in inflation, and we will do our part,” he affirmed. On a broader scale, consumer prices have risen by 5.06% over 12 months ending February, exceeding the official target of 3% with a tolerance range of 1.5 percentage points.
The central bank has indicated plans for a smaller rate hike in May, projecting inflation rates of 5.1% for 2025 and 3.9% by the third quarter of 2026, which will be influenced by current monetary policies. Haddad admitted that both fiscal and inflation targets are challenging, yet he emphasized the government’s commitment to achieving them. The administration is targeting a zero primary deficit this year, with the budget bill’s sponsor estimating a potential surplus of 15 billion reais, expecting a vote on this bill soon.
Finance Minister Fernando Haddad asserts that a recession is unnecessary to curb inflation in Brazil, asserting the potential for economic growth alongside price stability. With the recent central bank interest rate increase and set inflation targets, the government’s commitment to fiscal responsibility remains evident. The projected trajectory of inflation raises awareness of ongoing economic strategies, highlighting the importance of both fiscal discipline and sound monetary policy in the country’s economic future.
Original Source: www.tradingview.com
