RIO DE JANEIRO, Nov 12 (Businesshala) – Brazil’s economy minister Paulo Guedes said on Friday that markets are underestimating the country’s growth potential, adding that he expects the economy to exceed 5% this year and more in 2022. will increase by at least 1%.
Geddes this week shrugged off criticism from The Economist that he was backing the government’s effort to circumvent a constitutional spending limit that was crucial in correcting Brazil’s finances.
“Economists should look to their navel. Brazil is better than the big economies, especially the United Kingdom,” he said, referring to the country which is the headquarters of the magazine.
Geddes said: “What will be doing well is England. There are lines to buy cars, there is a shortage of meat, and GDP has declined by 9.7% while we have fallen by 4%,” he said.
The Focus survey of economists from Brazil’s central bank, which is seen as an indicator of market sentiment, lowered growth expectations for the next year from 1.2% to 1%. Some financial analysts are already forecasting growth near zero, warning that there is a risk of continued inflation with stagflation or slowing growth.
“They continue to underestimate Brazil. When we went down, they underestimated, and I think they will be wrong again,” Guedes told Businesshala in a telephone interview on Friday.
Latin America’s largest economy has a solid footing despite the coronavirus-induced economic shock, which causes record unemployment, he said.
“Fiscal fundamentals are very strong and the central bank is chasing inflation,” he said. In October, the consumer price index rose 1.25%, the biggest monthly increase since 2002, pushing annual inflation to 10.67%.
Geddes said that, despite the pandemic, the country is investing extensively, such as was done by private companies in the 5G spectrum telecom auction last week. (Reporting by Rodrigo Viga, Writing by Anthony Bodle; Editing by Aurora Ellis)