Haddad Calls On Congress to Sustain Economy’s Momentum

(Bloomberg) -- Brazil’s Finance Minister Fernando Haddad called on Congress to pass laws that will help the economy sustain its momentum after gross domestic product expanded more than expected in the second quarter, local newspaper O Globo reported.

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Congress plays a “key role in the second half of the year,” the newspaper cited the minister as saying. Haddad, who was speaking at an event held by Brazilian investment broker XP in Sao Paulo, emphasized the need to move away from decisions that would harm the government’s revenue or increase compulsory expenditures.

One of Haddad’s main proposals to shore up Brazil’s public accounts is the taxation of so-called exclusive and offshore funds that have previously received preferential tax treatment. The Brazilian government has published a provisional measure seeking to tax those funds, but the proposal still needs Congressional approval before it can be enacted.

“If Congress joins forces with the government and approves measures in the right direction, removes other risks by the end of the year and approves a consistent work agenda, I think we will end the year very well,” the minister said.

Read more: Brazil Economic Growth Blows Past Forecasts in Win for Lula

Haddad also called on the central bank to lower its benchmark interest rate, news portal Poder360 said.

“It’s about time to cut” by 0.75 percentage point, Poder360 cited Haddad as saying. “It is hard to explain to foreigners how the Brazilian economy can grow 3% this year with an real interest rate at 10%.”

(Corrects to say percentage point in last paragraph in story published on Sept. 2.)

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