In a message to the Central Bank, the Minister of Labor and Employment, Luiz Marinho, stated on Monday (26) that inflation cannot be controlled only by raising interest rates and restricting credit. According to him, there are other ways to control price increases, such as increasing production.
“The Central Bank needs to learn that there is more than just one way to combat inflation, which is to restrict credit and raise interest rates. Inflation can also be controlled through supply, through increased production, and through greater purchasing power among the country’s working class. Because there is room for that. We saw in the Lula 1 and 2 governments that we controlled inflation through increased production,” said Marinho, at an event at the headquarters of the National Bank for Economic and Social Development (BNDES), in Rio de Janeiro.
According to him, the country’s production sector has not yet reached its full installed capacity. “There is room for production growth. And if there is 100% occupancy, what [o setor produtivo] plan new investments. This is what can combat inflation without having to resort to raising interest rates or restricting credit.”
Job
The Minister of Labor also stated that the July data from the General Register of Employment and Unemployment (Caged), which will be released this week, will bring positive results regarding job creation.
“In the first seven months of this year, the number is higher than in the 12 months of last year. The industry is doing well. The jobs generated in the industry in the first seven months are higher than the jobs in the industry in the entire year of last year,” the minister said in Rio de Janeiro.
In relation to Rio Grande do Sul, in July there was a resumption of job creation, after negative data in May and June, which had been a result of the floods that hit the state in the first half of this year.
Fiscal commitment
The minister also stated that the Ministry does not have the budget to carry out some activities due to the “zero fiscal deficit”. “I thought we should have made a zero fiscal commitment, yes, but not in 12 months. I thought we should have had a zero fiscal commitment for ten years, eight years, and that we should be held accountable each year for our responsibility to reduce the fiscal deficit. But the contract is signed and we are meeting the zero fiscal deficit in one year. However, there will be a lack of budget for many areas”, he highlighted.
