Brazil will return to sustainable growth with private investment, says Economy Minister
RIO DE JANEIRO, BRAZIL – Brazilian Economy Minister Paulo Guedes, referring to the approved changes to the regulatory framework for infrastructure, reiterated the assessment that the country will return to sustainable growth through private investment.
“Brazil has become the largest investment country globally in the real economy. These are not forecasts but contracts already signed for investments in the coming years. We no longer depend on a public sector that has exhausted its investment capacity due to the stupidities of the past,” the minister said Tuesday, February 1, during virtual participation in the Latin America Investment Conference organized by Credit Suisse.
Guedes also said that, if elected, the second term of President Jair Bolsonaro would aim to continue the transition of the Brazilian economy, which he believes is not yet complete. “We sometimes have difficulties implementing privatizations, even though the president has received 60 million votes and has committed to a liberal program,” he said. Sometimes the opposition is inside the government,” he said.
According to Guedes, the government has tackled all the expenses that have gotten out of hand. “We will have a higher interest expense this year precisely because we are fighting inflation,” he acknowledged.
Once again, the minister complained about critics who accuse the government of “fiscal populism.” “They have been wrong by trillions in their projections about the national debt. Many pessimistic people talk nonsense; they are no longer analysts, they are militants,” he assessed.
OECD
The Economy Minister also affirmed that Brazil was making progress in opening up internationally and was on its way to full integration into the Organization for Economic Cooperation and Development (OECD).
“For the first time in history, the Mercosur Common External Tariff has been reduced by 10%, and we will continue to advance. And we are on the membership list of the OECD,” he stressed at the event organized by Credit Suisse.
Guedes assessed that the current G-20 presidency – with Indonesia – is sensitive to the problems of the “emerging giants.” “Indonesia is an important country, like Mexico. Our G-7 of emerging economies has a larger GDP than the seven richest advanced countries,” he compared. “We are a member of BRICS, the G-20, and we are about to join the OECD, which links us with the Europeans and the Americans,” he said.
Paulo Guedes again denied that the sharp increase in tax revenues in 2021 – to a record level – was only because of high inflation last year. “When inflation reached 15% under Dilma, we should have had an extraordinary tax collection, but that is not the case. Inflation increases tax revenues, but it also increases spending, unless you dare to deindex spending,” the minister said.
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