São Paulo, June 16, 2003 (Agência Brasil - ABr) - The president of the Brazilian Textile Industry Association (Abit), Paulo Skaf, called for a significant reduction in the prime interest rate, Selic, which currently stands at 26.5%. In his analysis, the concern today should be with deflation. This, according to the industrial leader, was maded clear at the meeting between the members of the Economic and Social Development Council and President Luiz Inácio Lula da Silva.

Without defining the percentage he considers ideal for the resumption of economic growth, Skaf confined himself to declaring that "a fall of 0.5% or 1% is too little." The fact is that, in his view, the country would be much better off if interest rates were lower than at their current level. He made these statements on Friday (13) at the seminar "Ideology aside, everything about the FTAA," organized by the American Chamber of Commerce.

He informed that, in recent months, high interest rates have caused an increase in idle capacity, which has reached an average of 20-30%. He recalled, however, that the situation for foreign sales is more comfortable, with a forecast for concluding the year up 30%. (DAS)