BRASILIA, Dec 18 (Reuters) - Less public spending is crucial for the Brazilian central bank to bring high inflation back to the center of the official target in 2016, bank chief Alexandre Tombini said on Thursday.
Speaking in a recorded interview with television news network GloboNews, Tombini said the incoming finance minister, Joaquim Levy, has signaled tighter fiscal policy ahead that should ease pressure on prices.
“These policies are being consciously implemented in a process to consolidate expenditures that will facilitate the convergence of inflation to 4.5 percent in 2016,” Tombini said.
The central bank aims to keep annual inflation at the center of the official range of 2.5 percent and 6.5 percent.
Tombini repeated that the bank remains very vigilant and that it will not be complacent with high inflation, which he believes will peak in the first quarter of next year.
After that, inflation should start a “long period of decline” that should bring it to the 4.5 percent center of the target by late 2016, he added.
Since Tombini became head of the central in 2011, inflation has remained well above the center of the target.
Inflation threatens to end this year above the ceiling of the target for the first time in a decade. (Reporting by Alonso Soto; Editing by Leslie Adler)