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BCB’s Campos Neto Says 2025 Fiscal Situation Likely To Be More Challenging

BRAZIL
  • Central Bank of Brazil Governor Roberto Campos Neto said Wednesday that 2025 will be a "year of challenge" in the fiscal arena and said the rate of increase in public debt will eventually have to be addressed.
  • "We have a chance to do slightly better than the market expects. 2025 is a more challenging year, and at some point, we need to address the issue that the debt trajectory needs to converge downwards. If this becomes a global issue, it will be even more important to do the fiscal homework," he said at an event sponsored by Bradesco BBI in Sao Paulo, adding that expansionist fiscal policies do not bring sustainable growth and increase inflation.
  • Meanwhile, Campos Neto said that the disinflation process in Brazil had been “more or less in line with the central bank’s understanding”, but that services inflation had been “slightly higher”. He also noted that the global disinflation process has stalled. On the FX, he said that year-to-date, BRL is relatively okay compared to other emerging countries, adding that the BCB’s FX intervention had nothing to do with the movement of the exchange rate.
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  • Central Bank of Brazil Governor Roberto Campos Neto said Wednesday that 2025 will be a "year of challenge" in the fiscal arena and said the rate of increase in public debt will eventually have to be addressed.
  • "We have a chance to do slightly better than the market expects. 2025 is a more challenging year, and at some point, we need to address the issue that the debt trajectory needs to converge downwards. If this becomes a global issue, it will be even more important to do the fiscal homework," he said at an event sponsored by Bradesco BBI in Sao Paulo, adding that expansionist fiscal policies do not bring sustainable growth and increase inflation.
  • Meanwhile, Campos Neto said that the disinflation process in Brazil had been “more or less in line with the central bank’s understanding”, but that services inflation had been “slightly higher”. He also noted that the global disinflation process has stalled. On the FX, he said that year-to-date, BRL is relatively okay compared to other emerging countries, adding that the BCB’s FX intervention had nothing to do with the movement of the exchange rate.