Durigan Says Fiscal Policy Won't Fully Explain Brazil's High Interest Rates

His comments foreshadow tighter public spending, technical updates to inflation measurement, closer Treasury–Central Bank coordination, and executive opposition to costly congressional bills that would widen deficits.

Overview

Durigan, speaking on a Warren Investimentos podcast on Monday, said Brazil's high interest rates cannot be blamed only on public spending and pointed to low domestic savings, exchange‑rate swings, and a country risk premium as key drivers.
He reiterated that the government will keep the 3% inflation target and backed technical reviews to update the inflation basket so it better reflects modern consumption such as streaming and cloud services.
The finance minister urged clearer, closer coordination between the Ministry of Finance and the Central Bank and welcomed methodological and transparency improvements to the Boletim Focus so long as the Central Bank leads the changes.
Durigan confirmed a fiscal 'trigger' created by the 2024 complementary law means no real (above‑inflation) pay rises for federal public servants in 2027 and described specific consolidation steps the team favors, including ending payroll tax breaks and revising tax incentives and PIS/Cofins credits.
He warned the executive will veto or seek Supreme Court review of high‑cost congressional measures, a posture that ties into the 2023 fiscal framework and could limit pre‑election spending pressures that would affect inflation and interest‑rate choices.