Brazilian President Luiz Inacio Lula da Silva expressed concerns over the “stubbornness” of the country’s central bank chief in keeping interest rates high.
Silva stated that there was no logical explanation for the persistence of the current benchmark interest rate at 11.25%, besides the determination of Central Bank President Roberto Campos Neto. Additionally, he claimed that Neto’s policies were delaying the growth of the Brazilian economy. The Central Bank of Brazil had reduced its benchmark interest rate by 250 basis points since August from its highest level maintained since 2016.
In an interview with the local TV channel SBT, Silva emphasized that there was no economic or inflation-related justification for the high interest rates. Last year, there were concerns about attacks on investor confidence in the independence of the central bank, particularly regarding the level of interest rates. However, Silva noted that relations with Campos Neto had improved in recent months, and they had engaged in “civilized discussions.”
The Brazilian economy showing a growth rate of 2.9% in 2023 indicated that President Silva’s administration had performed above expectations in its first year. This growth was attributed particularly to government spending programs initiated by President Jair Bolsonaro before the elections. Although the government expects the growth to be around 2.2% in 2024, it hopes it will exceed market expectations.
Lula stated in public platforms that he aimed to increase the growth rate to over 3% this year by attracting more foreign investment to Brazil. He believes that revitalizing the economy will come through more efforts to attract investments. Silva also mentioned that various policies and incentive measures would be implemented to enhance the country’s attractiveness to foreign investments. He believes these steps will help Brazil’s economy enter a stable and sustainable growth path.
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