Economy Minister Paulo Guedes said on Wednesday (8) that the Brazilian central bank acted faster than the monetary authorities of other countries in fighting inflation, which, for him, will make the Brazilian inflation controlled faster.
The statement was made during an event organized by the Apex Brasil (Brazilian Agency for the Promotion of Exports and Investments), shortly before the Central Bank’s Copom (Monetary Policy Committee) announces yet another increase in the Selic rate in order to hold back the rise in prices in the country.
“I think our Central Bank acted faster and we will control (inflation) sooner than most advanced countries. Inflation will be a big problem for the world in the next ten years, and I think Brazil is institutionally equipped to face it more quickly,” said the minister, in a presentation in English.
Guedes once again said that there has been a cycle of low inflation in the world in recent decades because billions of Eurasians —from China, India and Russia— emerged from poverty and entered global labor markets, which generated arbitrage in the world’s economies and prevented a advancement of wage levels.
For him, with the reduction of this effect and other changes in capital flows, the trend is for an acceleration of inflation in the world.
Noting that advanced economies are already seeing higher levels of inflation, Guedes said the US central bank will need to “wake up”.
“The Federal Reserve will have to wake up, because they are sleeping at the wheel. Inflation is strong and will last in the United States,” he said.
No tax reform
At the event, the minister also said that the government’s tax reform proposal should not be approved by the Legislature. “We sent Congress a proposal for tax reform, I don’t know if it will go ahead, I don’t think it will, it’s politics,” he said.
The economic team defended the approval of the Income Tax reform, which creates taxation on dividends and reduces the tax levied on companies.
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