The current economic scenario was described as a complex, with GDP growth predictions to 2025 ranging from 1.9% to 2.5%
He made his debut with a detailed analysis of the Brazilian economy, addressing the prospects for growth and the tax challenges that the country faces. The program was attended by three renowned economists: Samuel Pessoa, Felipe Salto and Guido Mantega. The current economic scenario was described as a complex, with growth predictions to 2025 ranging from 1.9% to 2.5%, according to the government. Despite the low unemployment rate, there is concerns about the lack of control of public spending, inflation and indebtedness.
Samuel Pessoa, PhD in Economics and Professor at the Getúlio Vargas Foundation, stressed that Brazilian economic growth, although positive, faces significant challenges. “We have increasing inflation … Service is the best indicator because it is not affected by external things.” Pessoa pointed out that the country has a “public debt that grows and very high interest rates.” He emphasized the need for a more intense fiscal adjustment after the elections, predicting that such adjustment will not be painless. He stressed that, despite the growth potential, the Brazilian economy is unbalanced.
Felipe Salto, expert in public accounts, reinforced the severity of the Brazilian fiscal staff. He explained that 94% of the budget is rigid, limiting the ability to relocate expenses. “Only 6% is the slice you can relocate. Within these 6% are investments, machine cost, research scholarships, passport emission, ministries’ cleaning, security and more parliamentary amendments, which in recent years have also added rigidity. This picture needs to be understood because the fiscal situation is serious. We have a large and growing mandatory expense,” he said.
Despite the fiscal scenario, Salto does not believe that Brazil is on the verge of an insolvency crisis. “The National Treasury has a cashier of $ 1.5 trillion, if he wants to be without a penny of public debt, which is the way governments borrow the market by paying a interest rate, he finances seven months of public deficit without issuing a penny,” he said.
Guido Mantega, former minister, compared the current situation with the 2010 period, when he grew 7.5%. He argued that, despite international challenges, Brazil is able to grow more than 3% per year without generating inflation. Mantega criticized current monetary policy, considering it overly restrictive, and pointed out that recent inflation was driven by supply shocks. “What has disturbed us since last year was the devaluation of the real, not only that, but also the inflation caused by the appreciation of the dollar.” He believes the exchange rate is stabilized and that the Central Bank may reduce interest before the inflation remains.
*With information from Samuel Pessoa, Felipe Salto and Guido Mantega
