São Paulo - The president of the Central Workers' Union (CUT), Luiz Marinho, and Paulo Skaf, recently elected president of the Federation of Industries of the State of São Paulo (Fiesp), called today for economic growth and declared their opposition to an economic policy of raising the benchmark interest rate (Selic) to fight inflation.

Marinho and Skaf spoke to the press prior to their participation in the 1st Forum on the Economy, sponsored by the School of Economics of the Getúlio Vargas Foundation. According to the president of the CUT, an increase in the Selic would be "a disaster." He remarked, however, that the possibility of an increase of only 0.25% "would be bad, but it could be offset by a forecast for a medium or long-term decrease."

The president-elect of the Fiesp, Skaf, said, in turn, that "the interest rates definitely hinder investment, and without investment there is no growth." In his opinion, current inflationary pressures are not the result of an increase in demand.

In his view, economic growth is occurring mainly because last year was poor, and because of exports. Without taking an explicit stand for or against an increase in the Selic, Skal said: "If I were to choose, I would bet on investments, an increase in production, and an increase in consumption and supply," which suggests either maintaining or reducing the interest rate.

Agência Brasil
Reporter: Pedro Malavolta
Translator: David Silberstein
09/13/2004