The Secretary for Economic Policy at the Ministry of Finance, Guilherme Mello, stated that the Ministry of Finance has not yet guided the discussion on changing the inflation target. The statement was given at an event promoted by Bradesco Asset Management this Friday (10).
Mello also stated that there is a global debate on the inflation target and that the ministry’s technicians are following these discussions. “The Secretariat for Economic Policy advises the minister on various matters and this is one of them.
The Ministry of Finance did not guide this debate, which is happening not only in Brazil, it is a global debate, in the sense that inflationary shocks, from the moment of Covid, passing through the war in Ukraine and which, until the present moment, has been persistent”, said the secretary.
The statement came amid government criticism of the interest rate, which is at 13.75% per year, the highest level since 2017. Mello said it was the highest real interest rate in the world.
“We are the ones that increased the interest rate the most, even so we did not meet the target in 2021, 2022 and everything indicates that 2023 will be a year in which inflation will exceed the target”, added the secretary
Mello also said that there is a forecast of 2% growth in the Gross Domestic Product (GDP) and believes that it is possible to deflate the economy while maintaining a sustainable level of growth that allows for improvements in public policies.
About the tax reform, Mello stated that it should start with indirect taxation, which is the tax embedded in the final value of a product, which is passed on to the consumer. “It’s not just simplification, it’s the gain in competitiveness and productivity that will be generated from the approval of a value added tax”.
On direct taxation, which is the taxation applied directly on income, assets or consumption, Mello said that he intends to guide the subject after the possible approval of the tax reform on indirect taxes.
Finally, the secretary stated that the ministry is preparing a new fiscal framework that restores credibility in budget management, public management and that builds predictability of fiscal policy in the future.
“We created an instrument within the transitional PEC that provides for the possibility of approving a new fiscal framework based on a complementary law”, concluded Mello.
*Under the supervision of Brenda Silva
Source: CNN Brasil
I am an experienced journalist, writer, and editor with a passion for finance and business news. I have been working in the journalism field for over 6 years, covering a variety of topics from finance to technology. As an author at World Stock Market, I specialize in finance business-related topics.
