Haddad recognizes that GDP was weak and urges BC for more cuts in the Selic

Minister Fernando Haddad, of Finance, acknowledged that the 0.1% growth in the country’s GDP (Gross Domestic Product) in the third quarter of the year was weak, despite having been better than expected by the financial market, from a drop of up to 0.3%. He credited the performance to the beginning of the process of reducing the basic interest rate as of August, by the Central Bank, but urged the institution to make further cuts.

“We had a positive, but weak GDP, but with the interest rate cuts we hope that this year we will close at more than 3% growth, and we expect growth in the 2.5% range next year. But, the Central Bank needs to do its job,” he said late Tuesday afternoon (5) upon leaving the hotel where he was staying in Germany.

Also on Tuesday (5), the president of the Central Bank, Roberto Campos Neto, signaled that the Monetary Policy Committee (Copom) may continue to cut the basic interest rate by 0.50 percentage points, including at next week’s meeting.

A little earlier, during the live “Conversa com o Presidente”, Haddad had also commented on the result, but without mentioning the poor performance. He only mentioned that he expects Congress to approve all the measures sent by the government, what is still mainly missing is the taxation of online betting (the so-called “bets”) and the fiscal subsidy for the states.

President Luiz Inácio Lula da Silva (PT) also commented on the GDP result in the third quarter, but in an optimistic tone. According to him, “it’s not just a surprise. It is the result of the work of people who believe that it is possible to make things happen.”

Soon after leaving the hotel, Lula traveled back to Brazil straight to Rio de Janeiro, where he will participate in meetings of the summit meeting of Mercosur heads of state and associates. The president intends to try to move forward in talks to close the agreement with the European Union, although French president Emmanuel Macron has already been categorical in saying that he is against it, while the current Argentine president, Alberto Fernández, reduced his efforts days before the inauguration of Javier Milei, scheduled for Sunday (10).

Despite the drop in temperature and optimism about closing the agreement this week, Lula won the support of German Prime Minister Olaf Scholz, who said he was in favor of strengthening trade relations between the two blocs.