In an interview published on Thursday by Extra, a Brazilian newspaper, Durigan also signaled that the government is designing a new program that will be aimed at heavily indebted consumers and feature in Lula's presidential campaign.
Under the proposal being studied, the government could purchase debt at steep discounts to allow borrowers to clear overdue obligations, particularly older debts that creditors have largely written off, he said.
Officials are still assessing which categories of debt would be eligible, but the focus would be on the oldest liabilities, Durigan said.
"It is about making it possible for people who today have more jobs, more income and greater access to quality services to start over," he was quoted as saying.
The Finance Ministry confirmed to Reuters that the debt-relief initiative is being designed.
It would effectively represent another debt-relief measure only months after Lula relaunched "Desenrola," a broad government-backed debt renegotiation program that uses state guarantees to help reduce borrowing costs. It is now targeting borrowers who have remained current on their debts.
Critics say the debt-relief initiatives do not tackle the structural causes of indebtedness and could create moral hazard by encouraging consumers to expect future government-backed debt renegotiation programs.
Delinquency rates in Brazil have continued to climb to record levels as consumers grapple with high borrowing costs in an environment of elevated interest rates.
Investors have also demanded hefty risk premiums to finance the government, reflecting persistent concerns about its commitment to containing public spending growth.
EWZ•
