Finance Minister Fernando Haddad asserted that Brazil does not require a recession to manage inflation, indicating that economic growth can continue without excessive price increases. Following a rate hike to 14.25%, he underscored the importance of the central bank’s actions to meet inflation targets while the government strives for fiscal balance.
Brazil’s Finance Minister Fernando Haddad stated that a recession is not necessary to control inflation in the nation. He expressed confidence that economic growth could continue without causing rampant consumer price increases. Haddad emphasized that the central bank must act decisively to maintain inflation within its target range, following a recent interest rate hike to 14.25%.
During a radio interview, the minister remarked, “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.” He reassured listeners of the central bank’s commitment to managing inflation effectively.
As of February, consumer prices rose by 5.06% over the past year, surpassing the official target of 3% with a permitted tolerance range of ±1.5%. The central bank has indicated its intention to implement another rate increase in May, projecting an inflation rate of 5.1% for 2025 and 3.9% for the third quarter of 2026, influenced by current monetary policies.
Haddad acknowledged the challenges surrounding both fiscal and inflation targets and stressed the need for consistent efforts towards meeting these objectives. The government’s fiscal goal is to achieve a zero primary deficit this year, while Congress anticipates raising the projected balance to a 15 billion reais surplus, with a vote on the budget bill expected shortly.
In conclusion, Finance Minister Fernando Haddad asserts that Brazil can effectively control inflation without entering a recession. His remarks highlight the central bank’s role in stabilizing prices through interest rate adjustments, with an ongoing focus on achieving fiscal targets. The government’s commitment to a balanced budget and ongoing economic growth reflects a collaborative approach to monetary policy.
Original Source: www.tradingview.com
