Fiesp president says interest rates in Brazil are pornographic

The president of the Federation of Industries of the State of São Paulo (Fiesp), Josué Gomes da Silva, called interest rates in Brazil “pornographic”. In a speech this Monday (20), at the National Bank for Economic and Social Development (BNDES), he said that the current values are inconceivable and need to be reduced.

“The current interest rate in Brazil is inconceivable. Many want to associate it with a tax problem. The thesis is that there is a fiscal abyss. Fiscal abyss in a country that has 73% of GDP in gross debt. Excluding the reserves (exchange rate) it is more or less 54% of debt. Excluding the National Treasury, net debt accounts for less than 45% of GDP in a country with the wealth of Brazil. So this is not a good explanation for the pornographic interest rates we practice in Brazil,” he said.

According to him, high interest rates harm investments by Brazilian industry.

At the same event, the Vice President of the Republic and Minister of Development, Industry, Commerce and Services, Geraldo Alckmin, also criticized the value of the basic interest rate, the Selic, which has been at 13.75% since August last year.

“There is nothing that justifies having an 8% real interest rate, above inflation, when there is no exploding demand and, on the other hand, in the whole world, there are practically negative interest rates. We believe in common sense and that we will, with the new fiscal anchorage, overcome this difficulty”, he said.

The Monetary Policy Committee (Copom), of the Central Bank, will meet as of this Tuesday (21), to define the new Selic rate.