Galípolo: "The job market is the most vibrant in 3 decades"
According to the president of the Central Bank, for the country to continue growing without inflationary pressure, it is important that this growth is driven by increased productivity.
Pedro Peduzzi, reporter for Agência Brasil - The president of the Central Bank, Gabriel Galípolo, said that the labor market in Brazil is "the most exuberant" in the last three decades. He also said that, according to market expectations, inflation is not expected to reach the target until at least 2028.
The statement was made this Monday (6) during a lecture given at the Fernando Henrique Cardoso Institute, in São Paulo.
"The historical series suggests that perhaps we are at full employment. We have quite strong data on what has been happening [in relation to this]. The wage bill and average real income have risen quite sharply in this sense. So I think it's difficult to say that we don't probably have the most exuberant labor market we've seen in the last three decades," said the president of the Central Bank.
Galípolo also said that for the country to continue growing without inflationary pressure, it is very important that this growth is driven by increased productivity. "But by a level of productivity that allows us to have sustainability, [so that we have] a longer duration of this growth," he added.
He reiterated that the interest rate hike is due to inflationary pressures. "We know that 15% is a high interest rate, but consider the situation we had in April: 57% of the items that make up the IPCA (Brazilian consumer price index) were more than double the inflation target," he said.
"We don't see inflation on target in any of the time horizons, not even until 2028, according to Focus expectations. Obviously, the Central Bank has its own projections. And we incorporate all of these projections. Within the Focus expectations and within our projections, this is a very worrying indication," he added.
