One wing evaluates that interest will only download with concrete spending cut proposals, another evaluates as a “disaster”
Ministers of the President (PT) assess that the increase in the basic interest rate of 0.25 percentage point may oblige the government to comply with the tax agenda – this is, to present concrete spending cut proposals.
Although the government’s fiscal wing argues that it is an opportunity to accelerate spending cuts, another part classifies as a disaster for the country’s economic stability.
In the view of this group, the executive is already controlling inflation. Critics of the petista administration, however, indicate that the expansion of public spending pressures inflation, preventing a consistent fall of interest.
The central bank this Wednesday (18.jun.2025) OA SELIC from 14.75% per year to 15% per year. The base interest has been on the highest level since June 2006, when it was 15.25% per year. Lula was in the final stretch of his first term that year.
This is the 7th rise performed by the Central Bank. Nevertheless, there was a slowdown in the level of the increase. The previous elevation was half a percentage point.
Selic is the basic interest rate of the Brazilian economy. Directly influences the rates that will be charged from loans, financing and investments. In the financial market, impacts the income of investments.
To the Poder360Minister of Development and Social Assistance, Wellington Dias, said the Central Bank makes a “Anti-Missing” the competence of the financial institution and worse the tax agenda. Stated that the decision contributes to “matar” the Brazilian productive sector. “Who interests those who battle, produce and pay taxes, via public debt?”questioned.
“The decision contributes to kill the Brazilian productive sector. Those who are interested in expropriating those who work, produce and pay taxes, via public debt … Only interest and debt services we will pay more than $ 1 trillion. And the poorest also pay the consequences of this measure without any technical logic.he declared.
To date, the government has not presented measures to cut public spending. Finance Minister Fernando Haddad on June 10 that the proposals would be defined in a National Congress leaders committee. According to him, the congressmen and the economic team will still “Back to the table” To discuss the agenda to reduce the discharge of the expenses. It did not give time or detailed what is on the table to curb public spending.
In an attempt to respond to criticism for the lack of spending cut and increased revenue, the government published an MP (Provisional Measure) to try to relieve spending by $ 15 billion by 2026. According to the Ministry of Finance, it would be $ 4.28 billion to 2025 and 10.69% for next year.
The alternative text to the discharge of IOF (Financial Operations Tax) was rejected by the Senate opposition in another defeat to the Planalto.
The House of Representatives approved on Monday (16.jun) for 346 votes to 97 The PDL (Legislative Decree Project) request, which revokes the Government Decree that increased the IOF. Now the proposal can be voted in the plenary at any time.
