On behalf of Lula, Durigan calls for a gradual adjustment of public accounts to reduce interest rates

The Minister of Finance, Dario Durigan, reported this Thursday (20) that, in a possible new term of President Luiz Inácio Lula da Silva, who is running for reelection again, the economic team will promote an adjustment of public accounts at the same intensity as the management — of two points of the Gross Domestic Product (GDP), a gradual movement. Speaking as a representative of Lula's campaign on CBN radio, the minister declared that the "fiscal framework", the current rule for public accounts approved in 2023, will be maintained, and that the economic team will continue working on proposals to cut mandatory spending and recover revenue, that is, increase revenue, "wherever it is unfair". "So that we make a fiscal effort, as was done in this government, we made a fiscal effort of 2% of GDP. This is essential for people to understand that there is no navigation in the dark. That we are ready to make an effort of the same dimension [in a possible new Lula mandate]", said the Minister of Finance. The fiscal adjustment strategy proposed by candidate Lula's campaign, according to the minister, includes maintaining social spending to reduce inequalities and increase investments, while at the same time allowing, according to his view, to face the issue of (high) interest rates. Currently at 14% per year, the Brazilian basic interest rate is the highest in the world in real terms, according to the MoneYou ranking. Analysts note, however, that the interest curve in the market for longer terms (which serve as a basis for the sale of public bonds) reflects the expectations of economic agents for public spending and activity, among others, and, consequently, for inflation.