By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – Although the possible increase in U.S. interest rates and the slowdown of the Chinese economies may hinder exports, the country’s Finance Minister, Joaquim Levy, said yesterday that Brazil is currently better prepared to face foreign shocks than it was fifteen years ago. The statement came as Levy attends the International Monetary Fund’s annual meeting in Lima, Peru this week.
“We have now, for example, international reserves, which we did not have back then,” said Levy during a meeting of the International Monetary Fund (IMF) in Lima Peru. “Our countries [of Latin America] are receiving these shocks and we are processing them,” added Levy.
According to the Brazilian official, during the years of high economic growth the country was able to improve its economic structure and expand its international reserves and is using these as a shield against external shocks.
“Our country and many other countries took advantage of the money seen during that favorable period to conduct radical changes, including the reduction of poverty, creation of a middle class and the expansion of access to education,” stated Levy. The Brazilian minister emphasized that what is crucial is to tell the truth about one’s economic situation.
IMF’s managing director, Christine Lagarde, agreed with Levy saying that Brazil was in the right economic path. “What he is trying to do is to reinforce and restructure a friendly environment for business, so that investments in Brazil can continue. To tell the truth…that is the way for improvement, without a doubt,” Lagarde said according to Agencia Brasil.
The IMF released its Fiscal Monitor on Thursday in Peru showing that negative results for Brazil’s public accounts are likely to be registered until 2017. Only then, will the country register a primary surplus according to the report. According to forecasts by the IMF Brazil will end the year with a primary deficit in its GDP of 0.4 percent, and the deficit is likely to increase further in 2016, to 0.9 percent.