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Speaking about inflation and interest, Lula resurrects one of the PT’s biggest mistakes

Brazil is facing a dilemma that seems to have been overcome: living with a little more inflation in order to have more growth.

The debate resurfaces from President Luiz Inácio Lula da Silva (PT) himself when, in an interview last Wednesday night (18) to the GloboNews channel, he questioned the independence of the Central Bank (BC), the current level of the Selic rate and the inflation target below 4.5%, “as it was in our time”.

Lula brings back to light one of the biggest mistakes of the PT’s last term, still under the management of former president Dilma Rousseff. At the time, the Central Bank did not have any independence and accepted that the country was living with an inflation much higher than the so-called 4.5%, which, incidentally, was not only because there were price controls. The rest is history.

By revealing his desire to change the inflation target, President Lula confirms a fear that was already around: as he is unable to interfere in the Central Bank and does not demonstrate conviction about fiscal responsibility, the government may change the IPCA target — an indicator that measures inflation. official inflation in the country — around 3%, where it is today.

The inflation that the municipality fights today is still the result of the shocks of the pandemic, combined with the unbridled spending of the last two years of Jair Bolsonaro (PL) in the presidential chair. The logic would be to fight the causes and, thus, take the country out of fiscal fragility. This does not seem to be the president’s determination.

In this Thursday’s episode (19), CNN Money also brings up the debate around the increase in the minimum wage, raised by President Lula and the Minister of Finance, Fernando Haddad, in recent days.

Presented by Thais Heredia, the CNN Money it presents a balance of the news subjects that influence markets, finances and the direction of society and the dynamics of power in Brazil and in the world.

*Posted by Tamara Nassif

Source: CNN Brasil

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