“Deceleration of the economy by BC came hard”, evaluates Haddad

“(It is) as expected (the IBC-Br). Very high real interest time. We are concerned, we are receiving a lot of feedback from mayors, from governors about collection, our same here”, said Haddad earlier this afternoon. Published every month by the BC, the IBC-Br works as a kind of preview of the Gross Domestic Product (GDP, sum of goods and services produced in the country).

The minister once again criticized the policy of high interest rates and said that real rates (interest less inflation) of around 10% a year harm the economy. “The intended deceleration of the economy by the Central Bank came hard. We need to be very careful about what could happen if rates are maintained at around 10% real interest per year. It’s too heavy on the economy,” he added.

On August 1st and 2nd, the Central Bank’s Monetary Policy Committee (Copom) will meet to decide whether to maintain the Selic Rate (basic interest rate for the economy) at 13.75% per year or whether to start a cycle of cuts. This will be the first meeting after the New BC directors take officeGabriel Galípolo (Monetary Policy) and Ailton Aquino (Supervision).

Haddad made the statement upon returning from a meeting at the Planalto Palace, which was included in the agenda at the last minute. According to the minister, the meeting dealt with possible aid to cooperatives of garbage collectors, whose population may be underestimated. “The Single Registry (of the federal government) lists 300,000 people as collectors of recyclable materials, but the real number could reach 1 million. The Treasury was asked to draw up scenarios to help this population”, informed the minister.