(Reuters) – Brazilian President Luiz Inacio Lula da Silva said on Saturday he was ready to analyze the finance minister’s policies. Fernando HaddadThe prime minister ruled out any proposed spending cuts but stressed that any fiscal adjustment would not come at the expense of the poor.
Left-wing President Lula, speaking at a news conference on the sidelines of the G7 summit in Italy, said unnecessary spending should be avoided amid growing pressure from investors for the government to cut spending and balance the budget.
“Mr. Haddad will never be weakened as long as I am president because he is the finance minister I chose and hired,” he said. “If Mr. Haddad has any proposals he will visit me this week to discuss the economy. I want to be clear that we will not make adjustments at the expense of the poor.”
The comments came after Haddad said he was focused on stepping up spending cuts, citing areas such as excessive civil servant salaries and illegal handouts.
The market plunged after the Senate rejected a controversial revenue-raising bill earlier this week, raising concerns that Haddad’s influence is waning.
Lula also said that while the media frequently talks about Brazil’s budget deficit, no one talks about high interest rates “in a country with an inflation rate of 4 percent.”
“Instead, they are celebrating with the central bank governor in Sao Paulo. Again, those who are there to celebrate must be profiting from interest rates,” he said.
Roberto Campos Neto, the central bank governor appointed by former President Jair Bolsonaro, was honored by the São Paulo state legislature on Monday and later attended a dinner hosted by state Governor Tarcisio de Freitas, who is seen as a right-wing candidate in the 2026 presidential election.
Brazil’s interest rates have fallen 325 basis points since August to 10.50%, while annual inflation hit 3.93% in May, against an official target of 3%. The next interest rate setting meeting is on June 18-19.
(Reporting by Marcela Ayres in Brasilia; Editing by Diane Craft)
