Keeping interest rates at 15% worries Brazilian productive sector
The decision by the Central Bank of Brazil’s Monetary Policy Committee (Copom) to maintain the Selic - the economy’s benchmark interest rate - at 15% per year prompted reactions from representatives of industry, commerce, construction, and the labor movement.
For the National Confederation of Industry (CNI), the high level of interest rates stifles economic activity and leaves Brazil isolated on the international stage, where most countries have already begun cutting rates.
In a statement, CNI President Ricardo Alban said that maintaining an “excessively contractionary” monetary policy is harmful to the country.
“The Selic has been slowing the economy far more than necessary, given that inflation is clearly on a downward trajectory. The current rate imposes unnecessary costs, threatening the labor market and the population’s well-being,” Alban said.
A CNI survey shows that 80 percent of industrial companies identify interest rates as the main obstacle to short-term credit, while 71 percent see them as the biggest impediment to long-term financing.
Construction
The construction sector also expressed concern. In a statement, the president of the Brazilian Chamber of the Construction Industry (CBIC), Renato Correia, stated that keeping the Selic rate high for a long period makes mortgage credit more expensive and discourages new projects.
“Construction is one of the sectors most sensitive to the cost of credit and consumer confidence. A Selic rate of 15 percent makes many projects unviable,” Correia noted.
In October, CBIC (Brazilian Chamber of the Construction Industry) reduced its 2025 growth projection for the sector from 2.3 percent to 1.3 percent, citing the impacts of the prolonged high interest rate cycle.
Unions point to fiscal impact
Labor federations also criticized the decision. According to the National Confederation of Workers in the Financial Sector (Contraf-CUT), affiliated with the Central Única dos Trabalhadores (CUT), each percentage point increase in the Selic rate raises public spending on debt interest by approximately BRL 50 billion.
Another labor federation, Força Sindical, described the scenario as the “era of extortionate interest rates.” In a statement, the federation’s president, Miguel Torres, said that the Central Bank’s policy undermines consumption and household income at the end of the year.
Supermarkets
High interest rates also drew criticism from the supermarket sector. According to the São Paulo Supermarket Association (APAS), Brazil is moving against the global trend of lowering interest rates.
“Today we have the second highest real interest rate in the world, harming investments and household consumption, and perpetuating structural obstacles to development,” said the entity’s chief economist, Felipe Queiroz.
Monetary caution
Although acknowledging that interest rates are high, the São Paulo Commercial Association (ACSP) believes that monetary policy is responding to other challenges. According to the association’s economist, Ulisses Ruiz de Gamboa, maintaining the Selic rate reflects a scenario in which inflation remains above the target, despite the slowdown in economic activity and the appreciation of the real.
“This situation, combined with fiscal expansion, labor market resilience, and external uncertainties, justifies a cautious monetary stance,” he explained.
