Roberto Dardis interviews economist Haroldo da Silva in a chat about interest rates, reforms and the economy in general

Roberto Dardis – Even knowing that we need general reforms, many run away from this hornet’s nest, what’s our way out?

Haroldo da Silva – So my dear, this term reforms for me is very compromised. Because sometimes reforms are said simply to cover up what is actually being discussed.
For example, we had the labor reform recently, it was necessary to make some changes in the labor issue. I have no doubt about that.

RD – How do you see the interest of 13.75%? Is blaming only the BC for these interest rates right?

HS – I see the economy extremely retracted, this interest rate of 13.75% per year is far above what would be the appropriate standards for Brazil if we do the following calculation, right? Risk Brazil plus an interest rate that we can consider neutral, right? Risk Brazil, plus inflation, you should have this interest rate below that value of 13.75%, around 9%, 10%.

RD – With a high public debt and without the government saving, will we have tax increases?

HS – I’ve never seen any government at any time make a structural change without wanting to embed some additional tax burden. So we can indeed have a tax increase.
But tax increases or tax increases are not always bad, contrary to what many people say.

RD– With low growth, inflation still outside the target and high interest rates, what would be the way out for the government to have a surplus in its accounts again?

HS – I think we have to stop discussing the primary surplus exclusively. Because the primary surplus is something much discussed only in Brazil, in the world everyone discusses surplus or deficit, but the budget in general, that is, this discussion includes what we pay in interest on debt securities.

RD – Political meddling in our economy. Do they disturb the country a lot?

HS – So I would say to you that political meddling in the economy is something that I see very naturally. The big problem is that the decisions are political, but they have to be guided by technical aspects, so the decision maker has to be clear about the technique that was involved and put it to him. Look, we have here a SWOT analysis in relation to its measure, the strengths, weaknesses, opportunities and threats in view of certain paths that were chosen.
But I don’t see any problems with politics being in the economy and I see that the debates are very healthy.

RD –We spoke with Haroldo da Silva, who sought to share his experiences with his perspectives on our economy.