Minister Guedes denies Brazil is losing control of its economy, despite political noise

RIO DE JANEIRO, BRAZIL – Despite the noise caused by expectations surrounding the 2022 elections, Brazil is not losing control of economic fundamentals, Minister of Economy Paulo Guedes said yesterday, August 23.

In an event promoted by the Brazilian Association of Industrial Property (ABPI), the Minister stated that the economy is growing and the public accounts deficit is dropping.

“There is absolutely no grounds, from a strictly economic standpoint, to say that Brazil is losing control. It is precisely the opposite: Brazil has undergone the greatest fiscal crisis, the greatest depression of modern times, and rebounded in record time,” he said.

According to Guedes, “the facts and fundamentals” show that the government “continues to do the right job.” The Minister reiterated the official projections that indicate a drop in the primary deficit – the negative result in the government’s accounts excluding interest on public debt.

“In fact, the fundamentals continue to indicate that we are going in the right direction. We reached 10.5% of GDP [Gross Domestic Product] in deficit, this year we have already dropped to 1% and the projection is that next year it will be 0.3%. That is, the deficit is virtually eliminated,” he declared.

Moderation

In the Minister’s assessment, the Brazilian economy was “taking off” in 2021 amid the recovery from the most acute phase of social distancing measures imposed by the Covid-19 pandemic. However, what he termed the “anticipation” of the electoral dispute in 2022 is undermining expectations.

“We were indeed picking up and now there is a kind of anticipation of the elections, which of course has an impact on expectations. This anticipation is obviously detrimental. It causes too much noise,” the Minister complained.

Guedes asked for moderation from political players to guarantee economic recovery and reaffirmed his confidence in institutions, citing the Presidency of the Republic, the Federal Supreme Court (STF), the Chamber of Deputies and the Senate. “With confidence in Brazilian democracy and mainly in institutions, we hope that the excesses committed by one part or another, by specific players, will be moderated,” he added.