Brazil Central Bank head says economic growth will be sustainable

The growth in Brazil’s economy and the reforms attached to it will be sustainable, unlike what happened in the past, said Central Bank President Roberto Campos Neto, who unveiled the bank’s quarter inflation report today (26).

In the document, the Central Bank estimates the country’s gross domestic product (GDP) to increase 0.9 percent this year and 1.8 percent in 2020.

Last year saw a more significant increase, boosted by public money, Campos Neto said. “But it was like a chicken’s flight.” Now, he added, the change came about thanks to a higher amount of private investment in economic growth because there is no fiscal room for more public spending and because a liberal policy has been adopted. “It’s a gradual recovery. And this recovery, along with the reforms, will have a more sustainable growth,” Campos Neto said.

The president of the financial institution said that, in addition to the strides made by the pension reform, progress in other areas is necessary to stimulate the economy. He mentioned the advance of the program to sell public assets, the Economic Freedom Law, and commercial opening measures.

Campos Neto also said that, for the Central Bank, “the best way to contribute to growth is keeping the inflation stable.” The target set by the National Monetary Found (CMN) for the inflation is 4.25 percent in 2019, and four percent in 2020, with a tolerance margin of plus or minus 1.5 percentage points.

Regarding the increase in the price of the dollar in Brazil, Neto explained it comes partly as a result of its appreciation worldwide, as well as the early payment of Brazilian firms’ debts overseas, like Petrobras.