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Brazil is coming out of recession, says Economy Minister

“The economy is coming back, we are out of the recession now, we are officially going to be out of the recession. We are resuming economic growth, "said Guedes


Brazil is coming out of recession, says Economy Minister
Minister Paulo Guedes participates in ENAEX - 39th National Meeting of Foreign Trade - Photo: Reproduction / AEB

Nov 14, Brasilia: In view of the 9.47% growth of the Brazilian economy in the months of July, August and September, released on Friday (13) by the Central Bank, the Minister of Economy, Paulo Guedes, affirmed that Brazil is indeed coming out of the recession. The Central Bank's Economic Activity Index (IBC-Br) indicated growth compared to the second quarter.



“The economy is coming back, we are out of the recession now, we are officially going to be out of the recession. We are resuming economic growth. Our challenges are precise to transform this cyclical recovery of the last three months, which should be projected for next year around 3%, 3.5%, 4% ”, stressed Paulo Guedes when participating in the 39th National Meeting of Foreign Trade.


“This strong cyclical recovery, we have a year or so to transform this into a resumption of sustainable growth. That is, instead of a consumption wave, in a strong cyclical recovery, expanding the use of idle capacity. The challenge is to transform this in the expansion of the productive capacity, which is investments, is to transform the consumption wave into the investment wave ”, adds the minister.


The IBC-Br is a way of evaluating the evolution of Brazilian economic activity and helping the Central Bank to make decisions about the basic interest rate, the Selic. It incorporates information on the level of activity of the three sectors of the economy: industry, trade and services and agriculture, in addition to the volume of taxes.



Government measures

The Minister of Economy detailed some of the measures adopted by the Federal Government that were fundamental for Brazil to resume its growth trajectory. Among them, pension and administrative reforms. Guedes also affirmed that the recovery of the economy will occur without the increase in taxes.


“We attacked social security privileges first, then dropped interest rates and will have an interest savings of R $ 400 billion,” explains Guedes. "Finally, the third big expense, which was the civil service wages, the cost of the machine, we made an administrative reform whose conservative estimate is R $ 300 billion in savings over the next ten years."


Guedes also mentioned that the Government is approving important regulatory frameworks in areas such as sanitation and natural gas to accelerate the attraction of investments to Brazil. And the growing digitalization of public services that have increased productivity and generated savings.



Emergency Aid

The payment of aid to the portion of the population that most suffers the financial impacts of the new coronavirus was another measure pointed out by Paulo Guedes as important. “We show that the health and life of Brazilians come first. We spent what was to be spent. The result is that Brazil has gone through the crisis and has already returned, leaving the recession and resuming growth with the reforms. ”


Job creation

The minister highlighted the resumption of jobs as a sign of the resumption of the Brazilian economy. “We created 300 thousand jobs in September, 100 thousand in July, 200 thousand in August. The pace is so strong that it may be difficult to maintain that pace. But the truth is that we have a job loss this year of around 550 thousand, less than the job loss that Brazil had in the recession of 2015 ”.



Civil construction was indicated as one of the drivers of the economy's leverage. “With low-interest rates and high exchange rates, investments are returning. (...) During the generalized crisis, the civil construction sector created jobs and is now accelerating hiring ”, reports the minister.


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