Brazil Freezes New Spending Amid High Interest Rates, Says Finance Minister Haddad

Brazilian Finance Minister Fernando Haddad announced that any discussions around increasing public spending are currently suspended as the government prioritizes fiscal sustainability. In an interview with Record TV, published Tuesday, Haddad emphasized that no new expenditures will be approved unless deemed absolutely essential.

His remarks come amid growing concern over Brazil’s monetary policy. Haddad criticized the central bank’s decision to raise the benchmark interest rate by 25 basis points to 15%—its highest level since 2006—calling the rate “very, very restrictive” and out of step with the country’s inflation outlook. He argued that such aggressive rate hikes are unnecessary, especially as inflationary pressures, particularly in food prices, are already beginning to ease.

The central bank has signaled an extended pause in further rate changes, raising concerns among government officials who believe the current rate could stifle economic growth. Haddad’s statements reflect the administration’s attempt to balance fiscal discipline with pro-growth policies amid economic uncertainty.

Brazil’s focus on maintaining fiscal responsibility while addressing high borrowing costs comes at a critical moment for Latin America’s largest economy. Investors and analysts are closely monitoring the government’s next steps as it navigates inflation control and public debt management without derailing recovery momentum.

The full interview with Minister Haddad is scheduled to air on Record News later this evening.