‘Don’t bet against the Brazilian economy that it’s going to go wrong,’ says Guedes in Dubai

Economy Minister Paulo Guedes said this Sunday (14) in Dubai that the cycle of interest rate hikes by the Central Bank will not prevent Brazil from growing next year.

“The growth of the Brazilian economy [para 2022] is already hired. Interest rates will rise a little to fight inflation, but growth is contracted. Don’t bet against the Brazilian economy that it’s going to go wrong,” said Guedes, during a conversation with journalists at the opening of the Dubai Air Show, a fair for the air sector held in the emirate of the Persian Gulf.

According to Guedes, it is almost impossible for the country not to grow next year, contrary to most economists’ forecasts that the GDP will be stagnant, or even contract in 2022.

“Brazil has surprised, has been surprising. We have fallen less, we are back faster, we have created more jobs and we are growing more than the advanced economies. Once again, forecasts will be wrong,” he declared.

The rise in inflation, which is already approaching double digits, led the BC to start an accelerated process of raising the interest rate, which reached 7.75%, with forecasts that it will reach more than 9% soon.

Growth has been revised down every week by the Focus newsletter. The latest estimate is 1% high for 2022, but some consultants and banks are already predicting a recession.

Since the end of October, Itaú Unibanco has been working with a scenario of retraction in GDP (Gross Domestic Product) for 2022. The bank estimates a drop of 0.5%, mainly due to high inflation. Before, projected high of 0.5%.

On Friday (12), Credit Suisse released a new scenario, also forecasting a 0.5% drop in GDP next year. Previously, the Swiss bank estimated growth of 0.6%. In the review, the institution’s economists took into account the poor performance of the main sectors of the economy.

However, according to Guedes, Brazil’s growth is already guaranteed by an investment forecast that approaches R$700 billion in the coming months.

“Brazil has already contracted R$ 544 billion in investments. And with the 5G, there are another R$ 150 billion. I find it very difficult for Brazil not to grow next year,” he declared.

He said that one of the reasons for his trip to Dubai was to seek “petrodollars”, which will help finance investments in Brazil. According to him, this cycle is different from that which occurred in the 1970s, when money from oil-rich countries financed large Brazilian infrastructure projects based on public debt.

Guedes once again defended the approval of the PEC dos Precatórios, stating that it is necessary to help comply with the spending ceiling.

“The Legislative Branch gave us a ceiling to comply with, and the Judiciary gave us an order to spend R$90 billion that did not fit in the Budget. The idea of ​​amending the precatório is that we need to order the payment. Now there is a predictability of expenses.” .

According to him, the PEC “was an effort to fulfill a ceiling, not to break the ceiling”.

He stated that an alternative for those who have court orders to receive is to use them as currency to participate in privatization projects.

“You can participate in the privatizations of Eletrobras, Correios, airport auctions, the port of Santos. Or whoever has a precatory to receive and is indebted to the government, make a meeting of accounts,” he said.

Guedes also stated that the government is carrying out liberal reforms, despite the criticism of timidity in opening the economy. He cited as examples the Social Security reform, the independence of the Central Bank and the creation of legal frameworks for sanitation and gas.

The minister said that advancing reforms is essential for liberals to continue supporting President Jair Bolsonaro in a second term.

“It is a center-right government, an alliance of liberals in the economy and conservatives in customs. The liberals, in order to continue supporting us, and for us to have the president’s reelection, this democratic center wants reforms.”