Haddad says there is concern about credit retraction

The credit situation in Brazil has entered the order of the day, said this Tuesday (31) Finance Minister Fernando Haddad.

“We have an interest rate of 13.75%, with a concern about a possible retraction of credit in Brazil”, he said, after leaving a meeting with the board of Febraban (Brazilian Federation of Banks), in São Paulo.

The credit market had already been the subject of a meeting between the Treasury and the Central Bank the day before.

According to Haddad, a “quick agenda” will discuss the system of guarantees, the reduction of the spread (difference between the funding rate of banks and what they charge for loans) and improvement in the competition environment to make access to money cheaper.

“Expensive credit impedes business. You are simply stuck because the profit is lower than interest and then you cannot make economic activity viable,” said Haddad.

Aloizio Mercadante, president of the BNDES (National Bank for Economic and Social Development), also defended the need to reduce interest rates and spreads and said he hoped the bank would manage to be more present at Febraban.

“We have the highest interest rate in the world economy, we have to reduce spreads. The public sector, together with the private sector, will improve credit to produce more and generate more jobs in Brazil”, he said.

The BNDES president was also at the meeting with the banks and proposed that the government and the federation discuss a bill to reduce the TLP (Long-Term Rate). It considers the consumer price index (IPCA, official inflation) plus the real interest rate on Treasury bonds (NTN-B) and remunerates the main sources of funds for BNDES loans.

Mercadante ruled out an eventual return of the TJLP. “The BNDES does not need and is not able to receive subsidies from the Treasury, but it has room to reduce this interest rate and we want to do this together with Febraban”, he said.

The president of Febraban, Isaac Sidney, did not speak to the press at the end of the meeting.

In addition to Mercadante and Haddad, ministers Simone Tebet, of Planning, and Esther Dweck, of Public Management and Innovation, and Carlos Fávaro, of Agriculture, participated in the meeting.

What is happening at Carf is a shame, says Haddad

The Minister of Finance considered it natural that the change in the so-called casting vote at Carf (Administrative Council of Tax Appeals) is displeasing large companies, as shown by the Panel SA

“I would also like to judge my own cases, as all companies are doing today,” he said. Haddad also said he found the situation shameful. “There is no country in the world with this administrative dispute resolution system.”

According to the minister, the matter was not dealt with at the meeting with Febraban. Haddad said he had not been approached by anyone critical of the measure. “There’s no way to justify something like that.”

The tie-breaking vote in CARF decisions is once again the responsibility of the government. “It doesn’t exist because the taxpayer himself judges the notice of infraction. And we are not talking about thousands of companies, we are talking about 20, 30 companies that are benefiting from the pro-taxpayer tie with the most absurd theses, to the point of defying jurisprudence .”

Desenroll should be released in February

Desenrola Brasil to renegotiate debts and boost household consumption should be presented next week to President Luiz Inácio Lula da Silva and, according to Haddad, should be launched in February.

The program will be able to cover up to 40 million Brazilians who are indebted and have an income of up to two minimum wages (currently equivalent to R$ 2,604).

Tax reform and fuel exemption

This Tuesday, the Finance Minister returned to defend the tax reform. On the second, he heard from Fiesp (Federation of Industries of São Paulo) a request for a tax reduction for the sector, as a means of making the approval of the text feasible.

Haddad was not committed to the request, but said that “the tax reform provides for precisely that, it provides for a reduction in the tax burden.”

He once again discarded the extension of fuel exemptions, but indicated that the decision rests with President Lula.

“Since January 1st, I no longer discuss this matter. The decision was taken by the President of the Republic and he obviously can revisit the matter, but at this moment there was no provocation on his part to the Ministry of Finance.”

The Central Bank’s Focus Bulletin this Monday showed that economists raised their inflation projection for 2022 for the seventh time, to 5.74%, and are already considering the possibility of greater pressure from administered prices.

Haddad stated that inflation should be evaluated in the long run. “You can see the impact on public accounts as a whole and, obviously, there is great concern with the reduction in the deficit predicted by the previous government.”