February 27, 2024

Campos Neto says: We need to focus on structural reforms of the economy

Central Bank President Roberto Campos Neto. Photo: Alan Santos/PR

Central Bank President Roberto Campos Neto said on Friday (19) that Brazil needs to focus on structural reforms that can reduce neutral rates (those that do not stimulate or discourage the economy).

During a speech at an event promoted by the central bank itself, Campos Neto said that Brazil has made almost no reforms compared to other emerging countries, noting that the numbers already reflect a higher neutral rate, higher debt, and lower structural growth. “.

“We spent a lot of time talking about Cilic [taxa básica de juros]Whether it will go up or down, but when we look forward, we need to focus on the fact that we need structural reforms.

“We need to do things that lower the neutral rates. When I look at all the reforms that are being implemented in emerging countries, I see that here we have not moved nearly in that direction. And we need to do something, because this indebtedness and the higher neutral rate and lower growth is not good for Brazil added the British Columbia president.

The central bank governor also stressed the need for continued self-regulation in the fight against inflation. “We must persevere in inflation and reach the target,” he added.

The event, promoted by the Central Bank of Brazil, brought together names from several central banks around the world. During the sessions, most central bankers stressed the need for financial stability, without abandoning the pursuit of price stability.

In a video recorded and presented at one of the sessions, European Central Bank President Christine Lagarde stated that even in the face of economic risks stemming from the recent crisis of confidence in the global banking sector, central banks need to continue working to lower rates and avoid a possible recession.

Of course, regulators and supervisors still need to be more vigilant about industry risks. We are still not safe. But we cannot trade financial stability for price stability. “We have to pursue both goals at the same time,” Lagarde said.

The banker also added that it is important to note that while financial instability remains only a risk, high inflation is already a reality.

“We will do whatever is necessary to reach your target of bringing inflation down to 2%,” he added.