‘Brazil is out of sync with the rest of the world,’ says Economy Minister

The Minister of Economy, Paulo Guedes, said earlier that the Brazilian Central Bank was more attentive to developments in the world macroeconomy, referring to the stagflation scenario in which the world economy would be entering.

“Our Central Bank also moved before their Central Banks”, he said, referring to the other central banks, which started the monetary tightening process after Brazil.

He also pondered that he has been warning about the worsening of the world economic scenario for about three years – and he makes a new alert on the subject again today.

“Economies out there are entering a period of stagflation,” he warned. “And it’s going to be much more serious than I imagined,” he added.

Guedes spoke during the inauguration of the new president of the Securities and Exchange Commission (CVM), João Pedro Barroso Nascimento.

In his speech at the event, he commented that “serial mistakes” are being made about Brazilian economic growth forecasts.

In his understanding, Brazil’s economy would be better than the world’s economy. He also commented that the country intends to carry out reforms that other countries cannot do.

“Brazil is out of sync with the rest of the world”, he said, explaining that the Brazilian economy is on the rise while the world economy is on a downward trajectory.

“We made reforms. Brazil comes back in V [economic growth in “V”] as we said we would,” saying that the forecast errors regarding Brazil in practice stem from “a bit of militancy and a bit of unpreparedness.”

He listed several factors that should lead to Brazil’s sustainable economic growth trajectory.

“There is no way not to grow; Brazil is doomed to grow,” he said. “The unemployment rate is at 9.8%. We will have 100 million Brazilians working by the end of the year,” he said.

The minister pondered that negative forecasts regarding the Brazilian economy have to do with politics and misinformation.

“Politics makes a lot of noise, brings a lot of disinformation. Let’s look at the data. The real data is income and employment up, inflation and unemployment down,” he said, commenting that Brazil is “getting out of the path of misery” and that “some economies have already left, other economies are trying to get there, our neighbors here,” he said, without naming the nations.

The minister commented that costs in the world have begun to rise, amid an environment of a supply shock, with the possibility of a recession and rising inflation.

“Over 10, 20, 30 years, wages go up in those regions. Never have so many people fled hunger and poverty as that other side of the world with globalization,” he said.

“The world is entering a very common process that we knew about in the 80s, and they didn’t live it, but they are going to live it now,” he said.

At the event, Guedes recalled that when the CVM was born, he was abroad but remembers when the autarchy was created. He greeted the new president, Nascimento, and thanked the commission’s former president, Marcelo Barbosa, for the work done.

With information from Valor Econômico

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