President Luiz Inácio Lula da Silva is campaigning to oust Roberto Campos Neto from the presidency of the Central Bank.
The president is trying to blame widely admired banker for the setbacks his government may have in the economy.
The truth, however, is that the economic results achieved last year are impossible to attack.
And much of this is due to the balance of monetary policy over the last four years.
Roberto Campos Neto was elected Central Bank president of the year by the British magazine The Banker in 2021.
In the Presidency of the Republic, Lula prefers to leave the successful model aside.
The politician wants to increase public spending, which threatens to burst the debt and destroy one of the pillars of the country’s economy.
He has already made it clear that his government does not commit to fiscal austerity.
ABOVE AVERAGE RESULTS
With the executive at the head of the monetary authority aligned with the economic policy of Paulo Guedes, Brazil has achieved historic milestones.
And the above-average performance occurred even while facing two major unprecedented world problems.
Lula repeatedly criticizes Roberto Campos because the economy’s basic interest rates – the famous Selic rate – are at 13.75% yearly.
The President of Brazil fails to mention, however, that the Central Bank’s monetary policy put Brazil, for the first time in history, with inflation at the same time lower than that of the United States and Germany – the reference countries for the global economy.
INFLATION BELOW REFERENCE COUNTRIES
In 2022, Brazil’s inflation closed at 5.8%, according to data from the Brazilian Institute of Geography and Statistics.
At the same time, the increase in the cost of living for North Americans and Germans closed at 8% and 7.9%, respectively.
This performance occurred even in the face of two major international challenges: the covid-19 pandemic, which disrupted global supply chains, and the Russian invasion of Ukraine, which put upward pressure on prices across the globe.
OUTGROWING CHINA
With these unprecedented problems, the decisions made by the Central Bank have been fundamental for national economic growth.
Last year, Brazil’s Gross Domestic Product increased by 3.1%, according to estimates by the International Monetary Fund.
Thus, the Brazilian performance surpassed China’s (3%) for the first time in 42 years.
Furthermore, the national economy grew more than countries like the USA and Germany.
LULA FEELS THREATENED BY ROBERTO CAMPOS
This combination of growth and inflation at levels better than those of nations considered as references was reflected in more jobs.
Brazil has created 2 million new jobs with signed work cards throughout 2022.
In four years of Bolsonaro’s mandate, the expansion of vacancies reached 4 million.
In the end, Roberto Campos represents a threat to Lula by making decisions promoting Brazil’s economic health, despite any mistaken policies the current government may promote.
With information from Revista Oeste