Entities consider that the rise in interest rates penalizes the economy, impacted by uncertainties and lack of inputs
The industrial sector complained about the increase in the basic rate, the Selic. This Wednesday (3.Aug.2022), the BC (Central Bank) chose to raise interest rates by 0.5 percentage point, to 13.75% per year. He also indicated that it should rise to 14% in September, at the next Copom (Monetary Policy Committee) meeting.
But, for the CNI (National Confederation of Industry), the readjustment will “unnecessary additional costs” economic activity, with negative effects on consumption, production and jobs. read the text (59 KB).
In CNI’s calculations, the real interest rate – which considers the inflation expectation for the next 12 months – reached 7.8% per year. According to the CNI, the level is “very high” and already overcomes “sufficient level to decelerate inflation in the coming months, due to its restrictive and negative effects on economic activity”declared.
THE Infinity Asset calculated a higher percentage, 8.52%, for real interest in the period. Here’s the intact of the report (169 KB).
The president of the CNI, Robson Andrade, said that the new increase is to combat the rise in prices.
THE Firjan (Federation of Industries of the State of Rio de Janeiro) also published a note against the BC measure. Here’s the intact of the press release (32 KB). It classified the adjustment as inadequate because, according to the entity, the imbalance in the economy’s price level is not a phenomenon exclusively of demand, but mainly due to the restriction of supply. The sector complains about the lack of inputs to expand production.
“Inflationary dynamics are, to a large extent, the result of the disorganization of global production chains, caused by the covid-19 pandemic and potentiated by the impacts derived from the war in Ukraine. The shocks had repercussions, above all, on the rise in prices of inputs and raw materials”declared.
The entity said that the Selic at 14% sacrifices the economy, which still coexists with the effects of high costs. Higher interest rates also raise public debt at a time when the world is experiencing “high uncertainty”fueled by war, covid-19 and risk of global recession.
“It is essential to adopt a more moderate monetary policy, which is attentive to the challenges of economic growth in the coming years”said Robson Andrade.
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