Mansueto: financial tightening ought to begin to have a clearer impact within the 4th quarter

With the interest rate ending next year at 10.5%, which means a still high real interest rate, the trend is for inflation to converge to the target

Former Secretary of the National Treasury Mansueto Almeida believes that the effects of monetary tightening on activity should be more clearly perceived from the last quarter of 2022, leading to low growth in the economy next year.

On the other hand, he said that, with the interest rate ending next year at 10.5%, which means a still high real interest rate, the tendency is for inflation to converge to the target.

“In the last quarter, monetary policy began to have a clearer effect. Next year’s growth should be low due to the effect of monetary policy”, said Mansueto, who is chief economist at BTG Pactual, during Macro Day 2022, an event promoted by the bank.

The former Treasury secretary highlighted that the environment is one of high uncertainty, given the lack of definition, regardless of the outcome of the elections, on what the fiscal rule will be from January onwards. His assessment is that, with debt on the rise again from 2023 onwards, it would be important for the country to preserve a limit on spending, as well as the target for the result of primary accounts. “I really liked the cost cap. It is still a necessary rule because the country has high debt”, said Mansueto

“We don’t know if the market will believe in a rule that only has results in the long term”, added the former secretary, adding that the government should once again present a significant fiscal deficit if payments for current social programs are maintained.

Estadão Content