Brazil’s Finance Minister Fernando Haddad stated that recession is unnecessary for lowering inflation. He assured that the economy can maintain growth while controlling prices, underscoring the central bank’s responsibility in managing inflation through interest rate hikes. The government aims for a zero primary deficit amid rising inflation, with legislative adjustments underway for a projected surplus.
In a recent statement, Brazil’s Finance Minister Fernando Haddad asserted that a recession is not a prerequisite for reducing inflation in the country. He expressed confidence that economic growth can continue without allowing consumer prices to rise uncontrollably. Haddad emphasized the central bank’s role in addressing inflation and restoring it to targeted levels, especially after the recent increase in the benchmark interest rate to 14.25%.
During a radio interview, Minister Haddad stated, “We want inflation to remain increasingly under control. And we know that when it exceeds the target range, the central bank must act to bring it back to the level agreed upon with the National Monetary Council.” The current inflation rate is 5.06%, which surpasses the official target of 3%, allowing for a 1.5 percentage-point deviation.
The central bank is anticipated to implement a smaller rate hike in May, with projections indicating inflation rates of 5.1% in 2025 and 3.9% in the third quarter of 2026, contingent on current monetary decisions. Haddad acknowledged the challenges posed by both fiscal and inflation targets but maintained a commitment to achieving these goals. He revealed that the government is aiming for a zero primary deficit, with Congress intending to revise the budget bill to reflect a projected surplus of 15 billion reais. The vote on this bill is anticipated for Thursday.
Finance Minister Fernando Haddad of Brazil has articulated that a recession is not necessary to control inflation, outlining the central bank’s proactive measures. He stressed the importance of fiscal discipline, with the government targeting a zero primary deficit and aiming for an ultimately balanced budget. The commitment to managing inflation is evident, with projections for future rates reflecting the influence of current monetary policies.
Original Source: www.tradingview.com
