close_game
close_game

Brazil government to cut some import taxes to lower food costs

Bloomberg |
Jan 25, 2025 12:34 AM IST

President Luiz Inacio Lula da Silva is under pressure from the soaring cost of living as he starts the second half of his term.

Brazil’s government will cut some import taxes and eschew both price controls and the use of fiscal measures as it rushes to lower food costs, a top cabinet official said Friday.

Lula’s government is hopeful for a large agricultural harvest this year and is convinced that the free market should determine prices. (AFP)
Lula’s government is hopeful for a large agricultural harvest this year and is convinced that the free market should determine prices. (AFP)

The administration will reduce levies on imported food that’s cheaper abroad, and the Finance Ministry will study ways to cut intermediary costs, Chief of Staff Rui Costa told reporters in Brasilia. No unorthodox measure will be adopted, he said, adding that the government ruled out the use of subsidies.

“We want suggestions to reduce prices in supermarkets,” Costa said. “We want to join in with measures from the market. No unorthodox measures will be adopted, there will be no subsidies, there will be no price inspectors in the markets, there will be no price fixing.”

President Luiz Inacio Lula da Silva is under pressure from the soaring cost of living as he starts the second half of his term. Costa’s remarks come a day after Bloomberg News reported the government was weighing plans such as providing reduced-cost food products — possibly with subsidies — to combat inflation and boost the head of state’s standing. That report revived investor concerns over the commitment to fiscal responsibility.

Lula’s government is hopeful for a large agricultural harvest this year and is convinced that the free market should determine prices, Costa said. The administration will seek dialogue with food producers on costs, he said.

Brazil’s supermarket industry association Abras has presented the government with proposals that could indirectly allow companies to lower food costs, such as greater labor contract flexibility and the ability to sell medications that don’t require a prescription.

Food and beverage costs jumped 1.06% on the month in the first half of January, representing the top inflation driver in the period, the national statistics agency reported earlier on Friday.

Investors expect the central bank to raise interest rates to 15% this year, with cost-of-living increases seen above the 3% target through 2028.

rec-icon Recommended Topics
Read breaking news, latest updates from US, UK, Pakistan and other countries across the world on topics related to politics,crime, and national affairs along with Super Bowl 2025 Live Updates.
See More
Read breaking news, latest updates from US, UK, Pakistan and other countries across the world on topics related to politics,crime, and national affairs along with Super Bowl 2025 Live Updates.
SHARE THIS ARTICLE ON
SHARE
Story Saved
Live Score
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Wednesday, February 12, 2025
Start 14 Days Free Trial Subscribe Now
Follow Us On