By Richard Mann, Contributing Reporter

RIO DE JANEIRO, BRAZIL – After the GDP decline recorded in the first quarter, Economy Minister Paulo Guedes said on Thursday, May 30th, that the economy would only react once the Social Security reform was approved.

Paulo Guedes, Economy Minister, during a ceremony with the President of the Central Bank of Brazil. (Photo Alamy)

“The retraction is nothing new for us; we have always said that the Brazilian economy is stagnant. The interventionist model has knocked down growth rates in Brazil. The economy is at a standstill, waiting for reforms,” he said. “We are sure that, by implementing structural reforms, Brazil will resume sustainable growth.”

The minister noted that the government was expecting the economy to stall in the first quarter when it revised its economic growth projection to 1.6 percent this year.

“We are confident that revival is imminent. We need reforms precisely to resume growth. Welfare is the first of them, and it will provide prospects for fiscal stability for 15, 20 years,” he added.

Guedes summarized measures that, according to him, will be enacted after social security reforms, such as tax changes and what he calls the “cheap energy shock”, with modifications for the sector, and changes in the distribution of funds between states and municipalities.

“Brazil should be growing from 3 to 3.5 percent a year, and the economy collapsed. There was optimism regarding the first year of government as a result of the power of the liberal platform. The dream of growth is within our grasp; all we need are reforms,” he added.

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