Business · Economy · 21 hrs ago
Brazil needs lower public spending to bring down inflation and interest rates, columnist argues
A columnist argues that Brazil’s government needs to cut public spending to slow the growth of public debt.
The aim is to make it possible for the Central Bank to lower interest rates and support economic growth.
Brazil’s central bank has set its Selic rate at 13.75% a year, which the columnist says is needed to bring inflation to its target.
The writer warns against tolerating higher inflation or forcing rates down artificially, pointing to Brazil’s experience with severe inflation in the 1980s.
The article says public spending was controlled by a spending cap introduced in 2016, but the cap was later abandoned.
It argues that the government’s current fiscal framework could be improved to help reduce spending.
The writer says decisions on public finances should be guided by technical debate, not political pressure to protect spending.
A columnist argues that Brazil must reduce public spending to bring down inflation and interest rates.
The article says lower spending would slow the growth of public debt and give the Central Bank room to cut rates.
It describes the 3% inflation target, with a tolerance band of 1.5 percentage points in either direction, as appropriate for Brazil.
The columnist says the Selic rate is 13.75% a year because the Central Bank considers that level necessary to bring inflation to target.
The article warns against tolerating higher inflation or trying to lower interest rates artificially.
- Who
- An Estadão columnist argues for lower public spending.
- What
- The columnist says spending cuts are needed to reduce inflation and interest rates.
- When
- The article was published on 2026-11-08.
- Where
- Brazil.
- Why
- The columnist says lower spending would curb public debt growth and allow the Central Bank to cut interest rates.
Politicians seeking to preserve public spending
The Estadão columnist
Public spending
Politicians seeking to preserve public spending
Politicians may try to preserve spending because they see it as a source of popularity.
The Estadão columnist
The government should spend less to slow public debt growth and make lower inflation and interest rates possible.
Interest rates
Politicians seeking to preserve public spending
Not stated.
The Estadão columnist
Interest rates should not be reduced artificially; the columnist says lower spending is needed for lower rates.
Brazil experienced severe hyperinflation, according to the article.
Inflation came under control in Brazil.
Public spending came under control with the spending cap, the columnist says.
The spending cap was abandoned.
Estadão published the columnist’s argument for reducing public spending.
- Inflation target
- 3%, with a tolerance band of 1.5 percentage points in either direction
- Selic rate
- 13.75% a year
- Spending cap
- Introduced in 2016, according to the article
- Publication date
- 2026-11-08
- Outlet
- Estadão
1 source
What people are saying
What is discredited is current fiscal policy.
It does not matter what color the cat is, as long as it catches mice.