Inflation: Tebet predicts a positive surprise in the April IPCA – 05/09/2023 – Market

The Minister of Planning, Simone Tebet, has a positive expectation for inflation in the second quarter of 2023 and expects “a surprise” in the April data, which will be released this Friday (11).

“The value of inflation will come out a little lower than expected”, said the minister in a joint session of the Commissions for Regional Development and Infrastructure of the Senate, held this Tuesday (9).

According to Tebet, the evaluation takes into account the expectations of analysts collected by the Focus bulletin, compiled by BC (Central Bank), and not privileged information to which she would have access as a minister.

According to the minister, both she and President Luiz Inácio Lula da Silva (PT) receive the inflation data measured by the IBGE (Brazilian Institute of Geography and Statistics), an agency subordinate to the Ministry of Planning, one hour before it is released to the general public.

The minister also stated that Brazil does not currently have demand inflation, which should lead the Central Bank to reduce the basic interest rate, currently at 13.75%. This is because the high interest rate hinders the private sector from making loans and investing.

Brazil has a social deficit “much greater” than a fiscal deficit, he pointed out, before saying that it is important to harmonize the fiscal vision “in the light of Brazil’s social situation” in the face of the current scenario of falling inflation, which “is not more demand”.

Tebet’s consideration was made shortly after she praised the choice of the executive secretary of the Ministry of Finance, Gabriel Galípolo, for the Central Bank’s Monetary Policy board.

“He has everything to be the voice of Brazil within the Central Bank. Not divergent, but lucid, bringing new elements to the debate that needs a real vision of Brazil”, evaluated the minister.

The choice took place at a time when the government is at odds with the monetary authority. The BC kept the Selic rate at 13.75% at the Copom (Monetary Policy Committee) meeting held last week, even in the face of pressure from the federal government to reduce the basic interest rate.

The maintenance led President Lula to again criticize BC President Roberto Campos Neto, who, in his view, “has no commitment to Brazil.”