Panel SA: Businessmen criticize Lula’s speeches about BC and defend Campos Neto

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Panel SA: Businessmen criticize Lula’s speeches about BC and defend Campos Neto

The escalation of criticism that Luiz Inácio Lula da Silva (PT) has been making to the Central Bank has increased the discomfort in the private sector. Disturbed by the president’s speeches, businessmen defend the head of the autarchy, Roberto Campos Neto, and warn that the rhetoric has had the opposite effect of what Lula should have intended, with worsening expectations of inflation and pressure on interest rates.

This Monday (6), Lula again criticized the actions of the monetary authority and said that the current Selic level of 13.75% a year is a disgrace.

Flavio Rocha, owner of Riachuelo, says he sees an electoral project and defends containment of public spending. “What puts pressure on interest rates upwards is the prospect that the market is having of strong growth in public spending. Ending the independence of the Central Bank, exploding public spending and placing the BC subordinate to the federal government is simply breaking the thermometer. two ways to cure a fever: discover the cause and recommend the correct antibiotic or break the thermometer, which means no longer seeing the symptoms. You have to attack the symptoms, not break the thermometer”, says the entrepreneur.

Banker Ricardo Lacerda, from BR Partners, is also critical. “It is regrettable to see the Chief Executive attacking the independence of the Central Bank, a victory for society. Monetary policy is a mere reflection of the fiscal irresponsibility the country has plunged into. Roberto Campos is our last bastion against the insanity of economic policies”, he says. he.

Last week, Lula referred to Campos Neto as “this citizen” and said that he will wait until the end of the current mandate at the BC (which runs until the end of 2024) to reassess the independent Central Bank.

Investor Lawrence Pih says that the signs that Lula has been sending out against the independence of the BC and the level of interest rates are worrying because, in the Dilma Rousseff administration, with Alexandre Tombini in the presidency of the autarchy, the Selic was pressured down to the level of 7, 25%, but then had to rise to 14.25% while the rise in prices did not subside.

“Imagine if in the last six months, before an election with Bolsonaro as President, we didn’t have an independent BC. Where would the Selic go? Zero? The BC’s goal is to meet the inflation target, it has no mandate to make the economy grow ’ he says.

“Every government would like to have unlimited resources and low interest rates to make the economy grow, the problem is inflation. Without an independent BC, there is no brake. Economic agents are rational, they act according to economic logic and can act in the direction contrary to what the government wanted. We have recently seen the fall in asset prices, stock exchanges, the real and rising interest rates. All of this harms the economy. The market is made up of all economic agents, including the state at all levels of government “, says Pitch.

Former BNDES president Maria Silvia Bastos Marques says she views Lula’s speeches with concern. “Unfortunately, these statements go exactly in the opposite direction of what he wants, which is the reduction of interest rates, inflation, the return of growth, which will benefit everyone, especially the poorest”, she says.

Regarding the BC’s independence, the executive also recalls Tombini’s management during the Dilma years. In his approaches to the Central Bank, Lula usually says that, in his previous governments, Henrique Meirelles was no less independent than Campos Neto is today.

Maria Silvia points out that, during the Dilma government, the BC was seen precisely as not independent. “In 2015, we had the highest interest rate recently. It was 14.25%, inflation reaching 11%, discouraging expectations, precisely because the BC was seen as not independent. This was one of the reasons why the autonomy debate. Brazil went through a deep recession between 2015 and 2017, and all of this was generated by this macroeconomic maladjustment, this discouragement of inflation expectations. When he says, for example, that we are going to change the inflation target, when we we don’t have a new fiscal framework that anchors expectations and projections for inflation and the debt/GDP result, this is more fuel”, she says.

Alexandre Ostrowiecki, owner of Multilaser, also sees BC autonomy as an achievement to be preserved. “It is a historic Brazilian achievement, which helps to give credibility for investors to trust our economy. Certainly, this autonomy does not solve everything, but it helps to alleviate our chronic problem of fiscal deficits a little. If there is a setback in this field, we can expect a even greater imbalance, with uncontrolled inflation, flight of investments and higher unemployment”, says the businessman.

Joana Cunha with Paulo Ricardo Martins It is Diego Felix

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