In the same interview, the president also dismissed the economic team’s plan to remove the indexation of benefits such as the Continuous Cash Benefit (a pension for very poor elders and disabled people known as BPC) from the minimum wage. The idea was proposed by the minister of Planning and Budget, Simone Tebet, with the caveat that the linkage to pension benefits would be preserved.

“It’s not [possible to decouple BPC and minimum wage] because I don’t consider it an expense. The minimum wage is the minimum that a person needs to survive. If I think I’m going to solve the Brazilian economy’s problem by tightening the minimum of the minimum, I’m damned; I won’t go to heaven,” the president said.

Last week, Mr. Lula had already said the control of government accounts should focus on reviewing tax incentives. In recent months, market distrust of the government’s fiscal agenda has intensified, especially after the executive revised the fiscal targets upward for the coming years.

On Wednesday, the president asserted that his government is aware that “it cannot spend more” than it collects and, therefore, advocated that the State must stimulate economic sectors as a way to boost the domestic market, which would generate more revenue.

After the interview, the secretary of the National Treasury, Rogério Ceron, said he did not see “any surprises” in Mr. Lula’s comments and added that the economic team continues to work on measures related to expenses.

“The Budget Execution Board is bringing a set of diagnostics and issues to the president [Lula],” Mr. Ceron said while presenting the May National Treasury Results (RTN) bulletin. The RTN presents the primary result of the central government, including the Treasury, Social Security, and the Central Bank. “I didn’t see anything new in the president’s remarks compared to what was already public. We are at the diagnostic stage of expenses,” he added.

According to Mr. Ceron, the economic team agrees with President Lula’s assessment that adjustments can also be made through revenue. The secretary emphasized that so-called tax expenditures are high in Brazil. According to the Budget Guidelines Bill (PLDO), the federal government is expected to forgo R$536 billion due to these programs. This amount includes R$128 billion from Simples Nacional (a simplified tax regime for small businesses) and R$66 billion for the agricultural sector, including the exemption of the basic food basket.

“The president highlighted the enormity of tax benefits, which is something we have been alerting about for a long time, the enormity of tax benefits, especially for specific groups, which indeed erodes the tax base. But that doesn’t mean that we shouldn’t look at the expense side, which the president himself has also signaled,” the secretary added, although Mr. Lula said that it is still necessary to assess whether it is necessary to review expenses.

In the interview, Mr. Lula also commented on the relationship between Finance Minister Fernando Haddad and Chief of Staff Rui Costa. Divergences between the two aides also contribute to uncertainties about economic policy, mainly due to pressure from the government’s political wing for more spending, while the economic team is responsible for controlling the growth of expenses.

The president acknowledged that there are “differences” between the two. Despite this, Mr. Lula argued that disagreements are “healthy” and that he maintains “100% confidence” in the finance chief.

“Haddad is a very important person to me, very important to the country. Obviously, we have disagreements [Haddad and I], but that is healthy. He [Haddad] has 100% of my confidence, all the ministers have my confidence because I keep a good team,” Mr. Lula said.

The president indicated that the role of the chief of staff is to confront other ministers. “So, Rui does his job of saying no, and I comfort people,” he added.

As Valor recently showed, the power struggle between Mr. Haddad and Mr. Costa has become a problem that weakens the already strained dialogue with the Parliament.

The relationship worsened with the return of the provisional presidential decree on social taxes PIS/Cofins by Senate President Rodrigo Pacheco. This is because Mr. Lula signed the executive order proposed by Mr. Haddad on June 4, when Mr. Costa was in China with Vice President Geraldo Alckmin. Although signed by the president, the measure did not have the support of the private sector nor of Mr. Costa and the minister of Mines and Energy, Alexandre Silveira.

On the economic agenda, Mr. Lula also said that he would not appoint a Central Bank president for the market, but for Brazil. The statement was made a day after he met with the Central Bank’s Monetary Policy director, Gabriel Galípolo, who is considered to replace the current president of the institution, Roberto Campos Neto.

“I’m not thinking about the Central Bank yet [referring to the succession],” he said. But he praised Mr. Galípolo in the interview, saying he is “highly qualified.”

During the interview, Mr. Lula said that the question he always asks is whether there is a need to keep the interest rate at 10.5% per year if inflation is at 4%. In his view, the country needs to move towards an interest rate that enables growth.

“We have to keep inflation under control,” he said. “Inflation is under control in this country.”

Mr. Lula also said that the National Confederation of Industry (CNI) and the Federation of Industries of the State of São Paulo (FIESP) should hold a march against the interest rate. The sector expressed opposition to the recent decision by the Monetary Policy Committee (COPOM) to halt the cycle of interest rate cuts. “We need an interest rate that is compatible for us to grow more, and we need controlled inflation so that people can eat,” the president said.