BC estimates 2022 GDP growth ‘a little above 2%’, says Campos Neto

The Central Bank will review its GDP growth projection (Gross Domestic Product) in 2022 and currently estimates a value “a little above 2%”, said the president of the municipality, Roberto Campos Neto, this Thursday (18).

The BC’s latest projection for next year’s GDP, made in June, is up 1.7%. The next quarterly inflation report, with the updated value, will be released in September.

“Our current projection is a little above 2%, it should come out soon. [está] reviewing the projection upwards”, said Campos Neto at an event promoted by the bank BTG Pactual, in São Paulo.

“The real-time indicators have been better. We qualify that there are some effects that are temporary effects of government measures, but it is important to look a little at what growth is going forward. We see the industry, which is a little stopped, below the pre-pandemic level and the other sectors above, with services recovering more strongly”, he added.

In July, the Ministry of Economy had already raised the forecast for the country’s GDP growth in 2022 from 1.5% to 2%. The market, in turn, converged to the value expected by the government’s economic team this week, from according to the Focus bulletin released last Monday (15).

As for inflation, Campos Neto stated that the energy sector remains under pressure on the global stage, but that, in Brazil, [a inflação de energia] came back a lot with the tax cut measures adopted by the government.

In June, President Jair Bolsonaro (PL) sanctioned the law that sets a ceiling of 17% to 18% for ICMS (state tax) rates on fuel, electricity, transport and telecommunications. With the impact of the reduction on these items, Brazil had deflation (fall in prices) of 0.68% in July, informed the IBGE (Brazilian Institute of Geography and Statistics).

The BC president also said that there is an understanding of the agents that the work of the autarchy was “largely” done in the fight against inflation. According to him, Brazil is one of the few countries where the market already prices lower interest rates.

In early August, the Copom (Monetary Policy Committee) raised the basic interest rate (Selic) by 0.5 percentage point, to 13.75% per year, and said it would assess the need for a new hike of a smaller magnitude. at the next meeting.

In the last communiqué, the BC chose to emphasize the twelve-month accumulated inflation until the first quarter of 2024, in order to smooth the direct effects of the implemented tax measures.

Campos Neto said this Thursday that this analysis model is temporary, given the scenario of uncertainty, and does not change the target of the monetary authority. “We are talking about a relevant horizon and not about an inflation target,” he pointed out.

“Obviously it’s not permanent, it’s temporary. As this adjusts, we go back to working the way we’ve always worked,” he continued.

For the BC president, there is still some uncertainty regarding the temporary nature of some approved measures. He also returned to say that there is concern about the country’s fiscal situation.

“There is a concern about the extension of the measures and the way in which they will be extended. I think it’s too early to talk about this, there is still an ongoing debate about how this will be financed”, he said.

Campos Neto considers that the next president-elect to the Planalto Palace will have “a great immediate challenge of looking at the social and at the same time looking at debt stability [pública]”.

According to him, when looking at the past, the problem seems to be repeated in the country. “If we take minutes from four years ago, Brazil always talks about the inspector. The inspector is always in danger. When I retrieve material from the past, it seems that it is a ‘flashback’, there is always a problem with the inspector”, he commented. .

At the event, Campos Neto also stated that he will not accept being kept in the position of president of the BC for a new term in 2024. He says he was against the possibility of reappointment when the autonomy law of the municipality was designed, in force since 2021. ” If it had only depended on me, I would not have reappointed the law of autonomy [do BC]”, he highlighted.

The law determines fixed terms of four years for the president and directors of the autarchy, which can be renewed only once and do not coincide with that of the president of the Republic.

“I think that reappointment is unhealthy, it creates a fragility in the middle of the term because there will be a president of the Central Bank who will be interested in being reappointed and is exposed, at that moment, to the will of the Executive”, he said.