Brazilian Economy Minister criticizes IMF: “It has to work a little more”

On Wednesday, October 12, Brazil’s Economy Minister Paulo Guedes said the IMF (International Monetary Fund) has to “talk less nonsense” and “work a little more”.

He is in Washington, USA, to attend meetings of the entity.

The minister criticized calculations of the international organization indicating that Brazil could have spent half of what was paid in benefits during the pandemic of covid-19.

Brazil had a primary deficit of 10% of GDP (Gross Domestic Product) in 2020 with the payment of the emergency aid.

Guedes said the IMF should stop “pulling Brazil’s ear” and warn the United States and Europe, which are “asleep at the wheel” in controlling inflation and designing policies to prevent a global economic slowdown.

“Six months ago, everyone was saying that Brazilians are going hungry, and then the IMF says that spending could be lower,” Guedes told journalists.

The minister was speaking at a conference of JP Morgan. Guedes is in the US for the IMF and World Bank annual meetings.

“The IMF has to talk less nonsense and work a little more to alert the Americans, the Europeans, right?” he said.

Brazil has registered deflation for three consecutive months.

Inflation fell to 7.17% in the 12-month accumulated until September. The United States will release the CPI (consumer price index) on Thursday, October 13.

Until August, the annual rate was 8.3%.

The Brazilian Central Bank (BC) has ended the Selic – the cycle of high interest rates. It is now at 13.75% a year.

The hike served to bring inflation to the target, the interval between 2% and 5%. The goal must not be met in 2022.

On the other hand, the USA has interest rates of 3.25% to 3.50%. The Fed (Federal Reserve) has signaled that it will raise rates until the end of the year to control inflation.

According to Guedes, Brazil is growing more, and its inflation is lower. After the criticism toward the international fund, the minister pondered: “I don’t think the IMF is ill-willed with Brazil, but it is making technical mistakes”.

About public spending during the pandemic period, he affirmed that he is “very proud” of the expenses that allowed the reduction of poverty indexes in Brazil.

According to the IMF, the emergency aid covered almost 1/3 of the population, and the benefits were three times higher than the social standard and more than half the national minimum wage.

With information from Estadão