Brazil government seeks to accelerate economic agenda to prevent losing support from liberals

RIO DE JANEIRO, BRAZIL – “Our government is center-right, so we are liberal on the economy and conservative on customs. For the liberals to continue to support us to re-elect the President, we need reforms. They want to see administrative forms, they want to see privatizations advance,” Guedes said.

According to the Minister, although this has always been one of the government’s economic agenda priorities, the plan has often been interrupted because of other events, such as the coronavirus pandemic and other issues like the judicial debt imbroglio (government debts recognized by the courts) where the government seeks to postpone payment.

“The reforms have been interrupted at times because of all these things that happened, but we hope to be worthy of the liberals’ trust… if we don’t advance on this agenda: opening up the economy, privatizations, unlocking the investment agenda. This is what we are doing here in Dubai,” he said.

Guedes refrained from commenting on several issues that are not related to his area, such as fuel prices and the EMBRAER brouhaha, alleging that it is up to the Ministry of Defense.

Similarly, Guedes declined to discuss the rise in inflation, interest rates and oil prices on the international market. “Oil is a matter for the Ministry of Mines and Energy and inflation and interest rates are a matter for the Central Bank. I have my expectations, but I will not comment,” he said.

However, the Minister said that Brazil has begun the process of reducing import tariffs within MERCOSUR. “I want the modernization of MERCOSUR, specifically to increase supply at the moment when demand is strong and inflation is rising.”

He again said that there is much pessimism from economic agents regarding Brazil’s figures.

“We are very optimistic. The growth of the economy is contracted. Interest rates will rise somewhat to attack inflation, but growth is contracted, there are R$700 (US$128) billion in programmed investments beyond the work we will continue to do. Don’t bet against the Brazilian economy,” he advised.

According to Guedes, those presenting negative projections will lose money. “Once again forecasts for Brazil will be wrong. Everyone is saying that Brazil will not grow and I am seeing the opposite,” he argued. He said that in addition to the R$544 billion in planned investments, an additional R$150 billion have been contracted with the 5G technology auction, held earlier this month.

“We now have over R$700 billion in contracts. I think it is very difficult for Brazil not to grow next year. When they said Brazil would be in a depression, I said it was going to experience a ‘V’ recovery. They said I was optimistic, but the economy recovered in a ‘V’. Then I said that Brazil was going to grow and we are growing 5%. They are saying that next year it will not grow. I think it’s virtually impossible, because we have the R$700 billion already contracted.”