Bad-quality policies could abort Brazil’s chance to grow in the medium and long term, said today (15) the Minister of Economy, Paulo Guedes. The minister refuted the speech that the current government will leave a “cursed legacy”, and said that Brazil is “internationally recognized” for its economic dimension.
At an award event at the Institute for Applied Economic Research (Ipea), Guedes said that the Selic rate (basic interest rate for the economy) will begin to fall in the middle of next year. He returned to bet that the Gross Domestic Product (GDP) will grow 3% in 2023, a more optimistic estimate than that of the financial market.
According to the most recent edition of the Focus bulletin, a survey of financial institutions released every week by the Central Bank (BC), market analysts forecast an increase of just 0.75% in GDP in 2023 and official inflation by the IPCA of 5.08%.
This was one of Guedes’ last official agendas as Minister of Economy. Next week, he will go on vacation and is not expected to return to office before December 31.
In the minister’s assessment, a possible slowdown in the Brazilian economy in 2023 is more related to economic cycles than to the public policies implemented this year. Guedes again mentioned that the Brazilian economy made a “V” recovery in 2022 (a sharp drop followed by a sharp rise).
Guedes stated that, next year, there will be a natural cooling after this type of “V” resumption, rejecting that this slowdown is a “cursed inheritance”. He also said that technical models are often wrong at times of regime change.
“Brazil will grow zero, there will be a recession. Brazil grows 5% and comes back in ‘V’ shape. Oh, now it’s next year. Turns the doom roll. Now the next year is his. It says it’s cursed inheritance. In addition to being an intellectual error, fake news, and a dishonest excuse for what they are finding, it is colossal stupidity”, commented the minister.
Alternation of powers
The minister denied that the country is broken and said he considered the alternation of power “healthy”. He, however, criticized what he called using the public machine to keep himself in charge. “Tweaking a rule to perpetuate it is not civilizing,” said Guedes, without going into details.
Guedes also criticized the attempt to change the State Law, reducing the quarantine for participants in election campaigns and affiliated with political parties. According to him, the “extreme left” and the “extreme right” are similar in relation to “economic leadership”. “Both like to tinker with state-owned enterprises,” he criticized him. Regarding the current government, he denied that the tax cuts this year had an electoral objective. “We lower taxes because we control expenses. It is not for re-election”, he commented.
The president of the Central Bank, Roberto Campos Neto, also participated in the event. He paid tribute to his grandfather, one of the founders of the Institute of Applied Economic Research (Ipea). Also present at the event, the Minister of Mines and Energy, Adolfo Sachsida, said that the current government’s pro-market reforms will ensure growth for the poorest in the future.
