Inflation is ‘addressed’ by monetary policy, says Guedes – Prime Time Zone

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IPCA was 10.25% in the accumulated of 12 months in September, the highest value in five years; Economy Minister reaffirms that GDP will grow close to 2% in 2022

WALLACE MARTINS/FUTURA PRESS/ESTADÃO CONTENTPaulo Guedes, Minister of Economy, said he trusts Congress to approve PEC dos Precatórios and the administrative reform in 2021

The Minister of Economy, Paulo Guedes, stated this Friday, 8, that the inflation Brazilian is “addressed” by the monetary policy of the Banco Central (BC), and that the recent escalation of the Broad Consumer Price Index (IPCA). The official indicator of Brazilian inflation was 10.25% in the last 12 months ended in September, the highest value since February 2016. The price variation in the month reached 1.16%, the highest record for the period since 1994. “Inflation is high around the world. Countries that had zero now have 5%. It is natural that those who had an average of 4%, 5%, will now have 8%, 9%.” According to the head of the economic team, the BC’s independence is essential to bring inflation down. “No government has had the courage, public spirit and conviction to ensure that the money is not misused”, he said during an event with international investors promoted by Itaú.

Guedes also stated that he believes in the approval of the Proposed Amendment to the Constitution (PEC) of Precatório still this year. The special committee of the Chamber of Deputies to analyze the measure approved on Thursday, the 7th, the request for a collective view to postpone the vote to the 19th. to the text that aims to change the rules for payment of debts of the Union that no longer have recourse. The report foresees a ceiling of R$ 40 billion for the annual payment of precatory, based on the amount charged in 2016, the year of creation of the spending ceiling, corrected for inflation. According to the minister, the approval will be the result of talks with the Federal Supreme Court (STF) and Congress. “We are creating a solution, and we are going to approve that solution.” Guedes also said that he trusts the Legislature to approve the administrative reform also in 2021. ” “I believe and I will fight for it. I am confident that Congress will not fail”, he said, affirming the support of congressmen in other measures taken by the federal government.

The minister once again said that the Brazilian economy grows in a “V” — when a strong fall is followed by a robust rise — and that there is a lot of noise in politics. Guedes reinforced the perspective that the Gross Domestic Product (GDP) will grow close to 2% in 2022. The forecast goes in the opposite direction of the financial market estimates, which revised the expansion projection for next year to 1.57%. Other forecasts, however, are more pessimistic and see growth below 1%. “Our real problem is inflation, but growth is coming. We still don’t know the level, 2%, it could be a little more, a little less, but I’m just talking about facts. One thing is noise, politics, narratives. Facts are another thing,” he said.