Brazil’s Meirelles Sees Economic Growth if Reforms Approved

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Finance minister in Brazil, Henrique Meirelles, said that although the country should register slow growth due to the deep level of recession Brazil should reach the end of the year growing at a ‘strong rate’ if the necessary microeconomic and labor reforms are approved.

Meirelles is at the annual International Monetary Fund’s (IMF) Spring Meeting in Washington D.C., and said, “Our expectation is that we will have stronger than expected growth in 2018.”

According to the Brazilian official, growth in 2018 may exceed the three percent level if Congress approves the labor and social security reforms proposed by the Temer Administration. The Brazilian government is currently forecasting a 0.5 percent growth of the country’s GDP in 2017.

Commenting on the IMF’s forecast that Brazil’s growth in 2018 would be of 1.7 percent, the minister said that the Fund’s role to make a more ‘conservative’ assessment. In addition, said Meirelles, the report did not take into consideration the approval, on Wednesday of the emergency regime to vote on the labor reform bill in the Chamber of Deputies.

Despite the good news on the moving ahead of the labor reform, Meirelles says the Administration’s focus continues to be the approval of the social security reform. Meirelles reiterated that the changes to the original text, made in the Chamber of Deputies, will not compromise the fiscal adjustment and were expected by the Ministry of Finance.

Meirelles acknowledged that the pension reform will face greater resistance by the population and Congressional representatives than the labor reform, but that the government is open to dialoguing with critics to reach a compromise.

“We saw a few weeks ago much stronger demonstrations. I think it’s a bit calmer now… the (social security) reform is already moving along normally,” he concluded.