Tebet says that changing the inflation target is ‘an issue that is not on the table’

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At the beginning of the year, Lula defended an increase in the inflation target. For 2023, the target is set at 3.25% and, for the next two years, at 3%. The Minister of Planning, Simone Tebet Ton Molina/Fotoarena/Estadão Content The Minister of Planning and Budget, Simone Tebet, said this Monday (27th) that a change in the inflation target is not an issue being addressed by the economic team from the government. According to Tebet, it is “an issue that is not on the table”. At the beginning of the year, President Luiz Inácio Lula da Silva (PT) defended an increase in the inflation target, which is currently 3.25% for 2023 and is set at 3% for the next two years. It is up to the National Monetary Council (CMN) to set inflation targets. The council meets monthly and is formed by the ministers of Finance and Planning and Budget and by the president of the Central Bank, Roberto Campos Neto. The CMN has already set the inflation targets for the years 2023, 2024 and 2025. In June, it should establish the target for 2026, with the possibility of revising the others. “Regarding the inflation target, the parameters, whether we are going to change it or not, this is a non-issue for the government. At least, a non-issue for the Ministry of Finance and the Ministry of Planning and Budget,” stated Tebet at an event promoted by the Arko Advice. “And it is a non-issue not only because I cannot say that, it is a non-subject because Minister Haddad and I understand that this is an issue that is not on the table,” she added. According to Tebet, there are doubts about whether a change in the inflation target would bring the result expected by President Lula, which is an improvement in the economy with the possibility of reducing the basic interest rate, the Selic, currently at 13.75% per year. “‘Ah, but in the middle of the year is the date [da reunião do CMN]’. We are not discussing, we even have doubts if changing the target will generate the result we want, which is to reduce inflation so that we can have a decrease in the interest rate”, explained the minister. Tebet said that there was an initial conversation about the topic between her, the Minister of Finance, Fernando Haddad, and the president of the Central Bank, Roberto Campos Netos, but that, afterwards, the subject was not discussed further. “This was put on the table in the first meeting we had, but only after that we had at least two more and we didn’t deal with the issue of the inflation target”, said Tebet. Change in the inflation target will not be discussed by the CMN, says Haddad Ministry of Finance Executive Secretary of the Ministry of Finance, Gabriel Galípolo, stated that “there is no intention of changing the schedule of what was established”. “From the ‘intramural’ point of view, the debate by the government, for the time being there is no tension of changing the schedule of what was established, which is the regular one for the debate on the issue of the inflation target, which is for the Monetary Council in the middle of the year”, said Galípolo. He pointed out, however, that the subject has been studied “for a long time” by the Treasury and by the Central Bank, but that it transcends the issue specifically of the target. “It is something broader, which seeks to collect information about the international experience, […] trying to consider the particularities of a country like Brazil”, said the Secretary of Finance.

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