Posted Sep 29, 2022, 5:35 PMUpdated on Sep 29, 2022 at 6:01 PM
Paulo Guedes struggles like a handsome devil. The thunderous Minister of the Economy continues public interventions to defend his record before the elections. At 8 o’clock in the morning, conference at the Safra bank. Then meeting with the president of the car manufacturers lobby. After lunch, meeting with a local press boss. A frantic pace. And it’s been going on for a week. “We are going to become one of the five strongest economies in the world,” he insists.
Former investor converted to politics, Paulo Guedes succeeded in having a pension reform adopted in the first year of government. He has now decided to pull out all the stops to turn the tide in favor of the very unpopular President Jair Bolsonaro. A man of conviction, Paulo Guedes condemns the “blah blah blah” of the opposition and warns against the threat of the return of state interventionism.
On paper, it is true that the economy does not appear to be in such bad shape. Growth is stronger than expected. It could reach 2.5% this year, according to the OECD, after reaching 3.2% last year. “A robust performance,” says the Institute of International Finance (IIF), thanks to the rebound in services and household consumption. Another bright spot, underlines Paulo Guedes: the fall in unemployment, which has fallen below the 10% mark, according to official figures.
Gasoline price drop
President Bolsonaro has also embarked on a crusade to lower fuel prices. After firing three presidents of state-owned Petrobras who resisted political interference, he lowered a series of taxes that weighed on prices at the pump, bringing down inflation. “We have the cheapest gasoline in the world,” he was able to trumpet during the election campaign, to the greatest satisfaction of motorists. Inflation has thus fallen back below the 10% threshold, even if it remains very far from the target set by the central bank (3.5%).
“We’re not doing so badly compared to the rest of the world,” said a French entrepreneur. After a wave of relocations, Brazil could even benefit from a movement of relocations if it appears to be a quieter country. »
“Trillion Billions”
Another driver of growth: investment. Even with the surge in interest rates, which rose from 2% to 13.75% in 18 months, companies continue to invest in the long term. Paulo Guedes had announced an ambitious objective in terms of privatization: “1,000 billion reais” (about 200 billion euros).
We are still a long way off. But the opening to the private sector was real. In addition to the privatization of Eletrobras (the local EDF), numerous concessions have been granted, particularly in the water and sanitation sector. The national development bank estimates that some 50 billion euros have already been invested in infrastructure. And to give more impetus to investments, Paulo Guedes has just launched a new idea: privatize the beaches!
