The half percentage point cut in the Selic rate (basic economic interest) received criticism from entities in the productive sector. According to industry representatives and trade unions, interest rates remain high, slowing down the economy and making credit more expensive.
The National Confederation of Industry (CNI) classified the decision this Wednesday (31) by the Monetary Policy Committee (Copom) as “unjustifiable”. In a note, the entity’s president, Ricardo Alban, the Central Bank must have a greater understanding of the Brazilian reality. He called for more boldness in the rate of fall in the Selic rate to significantly reduce companies’ financial costs.
“Greater aggressiveness from the Copom is necessary and desirable so that there is a more significant reduction in the financial cost borne by companies, which accumulates throughout the production chains, and consumers. Without this urgent change of stance, we will continue to penalize not only the Brazilian economy, but especially Brazilians, with fewer jobs and income”, criticized Alban. Before the Copom meeting, the CNI had released a note asking for a cut of 0.75 percentage points.
According to the CNI, expectations for inflation in 2024 are below the target ceiling, and the exchange rate can contribute to controlling inflation. The statement recalled that the commercial dollar fell from R$5.40 at the beginning of 2023 to R$4.90 this year.
The Federation of Industries of the State of Rio de Janeiro (Firjan) issued a statement in which it considers the continued reductions in the Selic rate to be crucial for the economy. However, the entity states that there is room for more intense cuts.
“The return of inflation to the target in 2023 and the deceleration of the previous index in January have caused reductions in inflationary expectations, especially for the year 2024. The sharper interest cuts are also justified by short-term data, which indicate a scenario of slowdown in economic activity”, assesses Firjan.
trade union centers
The trade unions also criticized the 0.5 point decrease, which they called timid. The Confederação Única dos Trabalhadores (CUT) linked the cuts in the Selic rate to the drop in unemployment to 7.8%, released this Wednesday (31) by the Brazilian Institute of Geography and Statistics (IBGE)
In a statement, the CUT called for more aggressive cuts. For the union federation, interest rates remain high and undermine government measures to recover the economy. “There is no way for Selic to continue at these levels. How are we going to implement a reindustrialization project in Brazil, invest in health, in PAC works, how will the State be able to add money for so many fundamental areas, with interest rates above 10%?”, ponders the president of the National Confederation of Industrial Workers Financial Branch (Contraf-CUT), Juvandia Moreira.
Força Sindical called the drop of half a percentage point in the Selic “timid and insufficient”. “A little more boldness would bring enormous benefits to the productive sector, which generates jobs and income and has long been eager for significant economic growth. This sameness on the part of the Central Bank’s technocrats is absurd”, highlighted the entity’s note.
“Interest rates at stratospheric levels drain the country’s wealth, create enormous obstacles to national development and compromise the creation of jobs and social investments. We insist that maintaining interest rates at prohibitive levels hinders the resumption of economic growth”, stated in a statement the president of Força Sindical, Miguel Torres.