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PEC may force BC to raise Selic again in 2023, says economist

In an interview with CNN this Wednesday (30), the chief economist at Genial Investimentos, José Márcio Camargo, assessed that, if the PEC do Duplo maintains the BRL 198 billion extract, it is likely that the “Central Bank will be forced to rise again to Selic throughout 2023″.

“BRL 198 billion is 2% of GDP, that is, we will increase our deficit by 50% in relation to the year 2022. A substantial increase in the fiscal deficit like this can be paid for in three ways: increasing the tax burden, increasing the public debt or increasing inflation, three very negative options,” he said.

“Increasing the tax burden means lower growth, and increasing the public debt implies a higher interest rate and currency devaluation. That is, the increase in the fiscal deficit will be very negative and will probably force the Central Bank to raise the Selic rate again throughout 2023, when the expectation before the PEC was for a reduction.”

The economist also commented on market expectations regarding speculations about the new finance minister. So far, political names, such as Fernando Haddad (PT) and Geraldo Alckmin (PSB), are the main candidates for the portfolio, although bankers and businessmen have also appeared on the radar.

In Camargo’s view, “political names are not a problem for the Ministry of Finance”, citing the performance of Antonio Palocci in the Ministry of Civil Affairs.

Check out the full interview in the video above.

Source: CNN Brasil

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