In an interview with CNN Brazil This Friday (11), commentator Sergio Vale evaluated the consequences that a possible lack of control of public accounts, caused by the elected government of Luiz Inácio Lula da Silva (PT), could bring.
In his view, the Central Bank can raise the interest rate again, currently at the level of 13.75% per year – considered the peak of the autarchy’s monetary tightening cycle.
“The Central Bank was already aware of the possibility of raising interest rates in the last meetings, with minutes that signaled concern about the forwarding of the fiscal situation. The BC left that door open,” he said.
“If we don’t have clarity about what the fiscal regime will be for next year, especially if the name in front of the Ministry of Finance is not the least adequate for the country’s challenges, the BC will not shy away from returning to raise the interest rate. Perhaps not yet in the next decision, it may be that he expects the government’s first steps next year.”
Vale also commented on Brazil’s economic prospects if the Selic continues to rise: according to him, it is likely that the growth of the Gross Domestic Product (GDP) will be even lower than expected.
“This is another sign for the government to return to the normality that was expected since last week in relation to the fiscal issue, because, if not, it will be born very weakened.”
Check out the full interview in the video above.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
