The National Confederation of Industry (CNI) said that the first reduction in the Selic rate (basic interest rates) in four years, paves the way for the return of consumption and investment in the country.

In a statement, the organization said that the fall of 0.25 percentage point, determined by the Central Bank Monetary Policy Committee (Copom), marks the beginning of interest rate cuts cycle that the country needs to get out of recession.

For CNI, the decline in interest rates in the economy to 14% per year reflects the decrease in price and the expectation that inflation will reach the center of the target of 4.5% next year."CNI points out that the decline in interest rates is essential for the return of economic growth. The reduction of the Selic rate decrease credit costs for businesses and families, improving financial conditions and stimulating consumption and investment, "said the organization.

The Confederation of Industry warns, however, that the ultimate recovery of the Brazilian economy in the long run depends on the approval of the fiscal adjustment measures. The organization cited the establishment of growth limits for public spending and reform of Social Security. "Without fiscal adjustment, will remain the insolvency threats in the public sector, and the country will continue living with insufficient resources to finance the expansion of the economy," the statement concluded.

Source: Portal Brazil, with information from the Agency Brazil