On Tuesday, Brazilian President Lula da Silva once again urged the Central Bank for a "prompt" interest rate cut, which is currently at 13.75 percent.
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He described Central Bank President Roberto Campos Neto as "stubborn and fearful" and criticized him for not lowering interest rates despite the decreasing inflation.
These statements occurred before the Brazilian statistical office released its latest report, revealing that the Brazilian economy had a deflation of -0.08 percent for the first time this year.
As a result, the year-on-year inflation rate dropped from 3.94 percent to 3.16 percent, primarily due to the monthly decline in food and transportation prices.
Currently, the year-on-year index is below the Central Bank's 2023 target of 3.25 percent, with a tolerance margin of 1.5 percentage points in both directions.
The tweet reads, "GDP is growing. Inflation and fuel, rent and food prices are falling. The stock market had its best quarter since 2020 and the dollar price experienced the biggest decline in six years. It's the Lula effect!"
Since assuming the Brazilian presidency on January 1st, Lula has voiced strong criticism of the orthodox monetary policies embraced by the Central Bank, which insists on maintaining the annual interest rate at 13.75 percent despite the decreasing value of the dollar and the growing economy.
Lula advocates for a macroeconomic policy based on lower interest rates so that productive businesses can access credit at lower costs.
"We want peace, employment, wages, and education. That's what the people need at this moment," said the leader of the Workers' Party.
The June inflation data has raised expectations of a shift towards pro-industrial policies ahead of the next meeting of the Central Bank's monetary committee, which is scheduled for the first week of August.
According to the latest market forecasts, the interest rate is expected to end the year at an annual rate of 12 percent, with inflation close to 5 percent.