Minister Guedes: Brazil maintains fiscal responsibility

Brazil managed to maintain fiscal responsibility in 2021 after a record spending in 2020 due to the COVID-19 pandemic, Economy Minister Paulo Guedes said on Thursday (17). He participated in a meeting of finance ministers and Central Bank governors of G20 (group of the 20 largest economies on the planet) through a recorded video, and said that several forecasts about the country were wrong. 

“Our primary deficit fell from 10 percent of the gross domestic product (GDP) in 2020 to 0.4 percent in 2021, the best level since 2014. The gross public debt, which pessimists said would reach 100 percent of the GDP, is back to a manageable 80 percent in 2021. Public spending has fallen from 26 percent of the GDP to 18.6 percent. These are achievements that few economies in the world have reached. Pessimistic forecasts have been consistently proven wrong. We have maintained solid fiscal foundations,” the minister declared.

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Guedes also said that Brazil is prepared to grow. According to him, Brazilian GDP recovered rapidly in 2021, and the country became one of the nine G20 economies that restored the level of production registered before the pandemic.

For Guedes, the recovery of the Brazilian economy in 2021 can be explained by “the high rate of the population fully vaccinated” against COVID-19, and by programs to preserve jobs. In the minister’s assessment, the measures were enough to create 3 million formal jobs last year, and reduce unemployment rate.

The minister said that Brazil began to withdraw financial incentives last year, while continuing to pursue the reform agenda. Guedes mentioned other measures, such as the concession and privatization agenda which, according to him, attracted a record volume of private investment in infrastructure. Other measures mentioned by him were the advancement of digital government, and measures to reduce bureaucracy and improve business environment.

The G20 finance ministers and Central Bank governors meeting occurs in a hybrid way (presential and virtual) and ends today (Feb. 18). The event discusses strategies for a gradual exit from financial incentive programs adopted in the pandemic. The director of International Affairs and Corporate Risk Management from Brazil’s Central Bank Fernanda Guardado also participates in the meeting.