Popular car program is short-term, says Haddad – 05/26/2023 – Market

Popular car program is short-term, says Haddad – 05/26/2023 – Market

The Minister of Finance, Fernando Haddad, said this Friday (26) that the program aimed at reducing taxes on popular cars, announced by the government on Thursday (25), is a transitory, short-term measure, while the cycle does not start. rate cut in Brazil.

In an interview with GloboNews, Haddad stated that the program aims to provide a quick response to the problem of the concessionaires’ patios, which according to him would be full in the midst of a restrictive credit scenario due to the high level of the basic interest rate, the Selic.

Questioned about the duration of the program, Haddad stated that it should last much less than 12 months, since Brazil would already be about to start cutting the Selic rate.

“We are starting the interest rate reduction cycle shortly, the president of the Central Bank himself [Roberto Campos Neto] has been saying that things are lining up in that sense,” said the minister.

The speech, however, diverges from the public statements of Campos Neto, who has reiterated his concern with the slow process of deceleration of inflation in the country.

Haddad also refuted projections by experts who estimate a tax break of R$ 8 billion with the popular car program. “It doesn’t reach a quarter of that amount,” said the minister.

With regard to the criticism that the measure will reduce revenue without serving the poorest layers of society, Haddad argued that the government seeks to reach all social classes, and not just its traditional electoral base.


Regarding the government’s last two nominations for the Central Bank, Haddad said that he does not expect them to be organized as an opposition group.

Recently, Haddad announced the nominations of the Executive Secretary of Finance, Gabriel Galípolo, to the BC’s Monetary Policy Board, and Ailton Aquino dos Santos to the Supervisory Board,

“Galípolo and Ailton are not there to form an opposition bench at the Central Bank, that would be absurd”, stated Haddad. “There is not the slightest chance of us treating the BC as a Congress in which an opposition group is formed.”

The minister said that the role of the nominees is to offer the greatest possible technical knowledge to their peers at the Central Bank.

Haddad stated that it was the president of the Central Bank himself, Roberto Campos Neto, who suggested the name of Galípolo for the first time for the position of director of monetary policy at the BC. “He was the one who mentioned the name of Galípolo. We had already interviewed several other people”, he declared.

Regarding a change in the inflation target, the minister avoided giving his opinion, out of respect for the Minister of Planning and Budget, Simone Tebet, saying that he still needs to discuss the matter with the emedebista. Haddad also stated that he has no problem discussing the issue with the Central Bank.

The minister also said again that he prefers an inflation targeting regime that does not follow a fixed calendar, as is currently the case in Brazil, where the CMN (National Monetary Council) sets the target for the three calendar years ahead in June. “I see the continuous target very favorably,” he said.

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