Lula defends public investments and criticizes fiscal surplus targets, labeling high interest rates as the main driver of national debt.
President Luiz Inácio Lula da Silva (PT) has reaffirmed his stance on Brazilian fiscal policy, declaring at a rally in Curitiba (PR) that it is time to move away from the primary surplus target. For the head of the Executive Branch, the priority must be public investment as the primary engine for economic growth and job creation. These remarks mark a clear position against prioritizing fiscal austerity as the main path toward healthy public accounts.
In his speech, Lula downplayed the importance of a strict fiscal surplus, arguing that the real culprit behind Brazil’s public debt lies in high interest rates. He maintained that the government needs the capacity to invest to stimulate the economy, and that the relentless pursuit of a fiscal surplus is an obstacle to that goal. The Selic rate, currently at 14% per year, was cited as a major factor in the country’s indebtedness.
Criticism of fiscal policy and the defense of public investment
During the event in Curitiba, Lula emphasized the necessity of the State actively intervening in the economy. According to him, economic growth, which is essential for job creation, depends directly on the investments the government is capable of making. This perspective contrasts with approaches that prioritize spending cuts and fiscal surpluses to control public debt.
The president reiterated his criticism of the obsession with surpluses, describing it as “nonsense.” For Lula, the focus should be on reducing the burden of interest rates, which he considers the primary component of the national debt, rather than prioritizing a fiscal surplus. This stance signals a vision where the State plays a crucial role in the country’s economic and social development.
Investment in energy and the future
In addition to addressing fiscal policy, Lula commented on the recent oil discovery at the Equatorial Margin. He promised that the resources generated from this exploration will be directed toward future investments. The goal is to use profits from fossil fuel extraction to finance essential sectors such as education, science, technology, and healthcare, aiming to build a more sustainable and prosperous future for Brazil.
The federal government’s gross debt reached R$ 10.9 trillion in July, representing 82.5% of the GDP (Gross Domestic Product), a significant increase since the beginning of Lula‘s third term. The statement in Curitiba reinforces the government’s position of prioritizing growth through investment, even in the face of pressure for greater fiscal control and concerns regarding public debt, which the president largely attributes to high interest rates.
