RIO DE JANEIRO, BRAZIL – Central Bank President Roberto Campos Neto on Thursday said that the performance of agribusiness is very important for economic activity and warned that weather events could further affect Gross Domestic Product (GDP) growth expectations in 2022.
“The best way the Central Bank can contribute to the growth of the economy is by attacking inflation. We have a very strong memory of inflation and indexation in Brazil, so we have to effectively attack this problem,” Campos Neto said while participating in Santander’s Annual Latin American Conference.
COURT-ORDERED FEDERAL DEBT PEC
The Central Bank president acknowledged that the approval of the Court-ordered federal debt proposed constitutional amendment (PEC) with an extra fiscal room of R$100 (US$18.4) billion for the 2022 government led to part of a market perception that the spending cap had been breached. However, he again argued that Brazil’s fiscal results last year were better than previously projected.
He also recognized that part of the increase in tax collection last year was due to the rise in inflation, but pointed out structural changes in consumption and tax collection that should persist.
Campos Neto also claimed that despite the approval of reforms in recent years, growth projections for the Brazilian economy for the years ahead have in fact dropped.
“Virtually all of the factors that people blamed for low growth in the past have been addressed. We need to debate what kind of reforms need to be made to boost confidence in Brazil’s growth,” the Central Bank president said.