RIO DE JANEIRO, BRAZIL – Brazil managed to preserve fiscal responsibility in 2021 after record spending in 2020 due to the covid-19 pandemic, Economy Minister Paulo Guedes said on Thursday, February 17. He attended a meeting of finance ministers and central bank presidents of the G20 via recorded video and said that several projections about the country were wrong.
“Our primary deficit fell from 10% of GDP [Gross Domestic Product] in 2020 to 0.4% in 2021, the best level since 2014. Public [gross] debt, which pessimists said would reach 100% of GDP, is back to a manageable 80% in 2021. Public spending has fallen from 26% of GDP to 18.6%. These are achievements that few economies in the world have achieved. The pessimistic forecasts have been consistently proven wrong. We have maintained solid fiscal fundamentals,” the minister declared.
Guedes also said that Brazil is prepared for growth. According to him, the Brazilian GDP recovered rapidly in 2021, and the country became one of the nine G20 economies that recovered the production level observed before the pandemic.
For Guedes, the recovery of the Brazilian economy in 2021 can be explained by “the high rate of the population fully vaccinated” against the covid-19 and by the programs to preserve jobs. In the minister’s evaluation, the measures were enough to create 3 million formal jobs last year and reduce the unemployment rate.
The minister said that Brazil began to withdraw the stimulus last year, at the same time that it pursued its reform agenda. Guedes cited other measures, such as the concessions and privatization agenda, which attracted, according to him, a record volume of private investment in infrastructure. Other measures he mentioned were the advancement of digital government and measures to reduce bureaucracy and improve the business environment.
Held in hybrid form (face-to-face and virtual), the meeting of the G20 Finance Ministers and Central Bank Chairmen ends today, February 18. The event discusses a gradual exit strategy from the economic stimulus programs adopted in the pandemic. The Central Bank’s director of International Affairs and Corporate Risk Management, Fernanda Guardado, also participated in the meeting via videoconference.
With information from Agência Brasil