Alckmin says maintaining the Selic has a fiscal impact of R$ 190 billion

The acting president and Minister of Development, Industry and Commerce (MDIC), Geraldo Alckmin (PSB), criticized this Thursday (22) the decision of the Central Bank to maintain the basic interest rate (Selic) at 13.75% per year. According to Alckmin, in addition to causing damage to economic activity, inhibiting investment and harming trade and industry, this level of interest has a strong impact on the country’s fiscal situation, since a large part of the debt is indexed to the Selic rate.

“Almost half of the Brazilian public debt is sealed [indexada à Selic]. So, each 1% of the Selic rate costs BRL 38 billion [de pagamento do serviço da dívida pública]. There is nothing worse for the fiscal issue than an unnecessarily high Selic rate. So, BRL 38 billion for every 1%, if you have a rate 5% above what it should be, that costs practically BRL 190 billion”, said the acting president, reported Agência Brasil.

“You save a billion, half a billion, and end up spending almost R$ 200 billion because of having a Selic rate at that time”, he added. Alckmin is in the exercise of the Presidency of the Republic this week, during the trip of President Luiz Inácio Lula da Silva (PT) to Europe.

Alckmin assessed that the decision of the Monetary Policy Committee (Copom) of the Central Bank was “difficult to understand” in view of the scenario of falling inflation and negative international interest rates. “The world today has negative interest rates, inflation is falling, there is a deflation in the IGP [Índice Geral de Preços], in 12 months, of more than 6%. Future interest rates are falling and this Selic rate ends up having a fiscal impact. If the concern is debt, there is nothing worse than that,” he said.