Finance Minister: Economic adjustment aims to ensure new growth cycle

Finance Minister Joaquim Levy said today (Mar 31) during a public hearing held by the Senate's Commission for Economic Affairs (CAE), that the government is set to adopt a series of measures aimed at leading the country to a new growth cycle. In his view, the moves will also bring about a favorable economic climate, which would prevent the country's credit rating from being lowered by credit rating agencies.

“If we want to avoid a crisis, we must treat investments as an important issue. If there's a risk of losing the investment rating, costs will skyrocket for the government and the companies that will no longer be capable of getting [cheaper] credit and [generating jobs],” the minister said.

Joaquim Levy noted that maintaining Brazil's investment rating is crucial to the country, as a favorable rating encourages foreign investment. He went on to reiterate that there are a large number of foreign companies and international investment funds which choose no longer to invest in a country after it faces a downgrade. The minister also argued that public accounts should be tackled wisely, and that the public debt should be given sustainability, as that would indicate a peaceful scenario for both investments and employment.

The minister told senators the economic adjustments should be promptly carried out, in a bid to provide the country with a development platform. “As President [Rousseff] says, we don't have to make the adjustment for the adjustment's sake. Our goal must be to achieve growth,” he said. What motivated the government to adopt the economic adjustment was the deterioration facing fiscal and external accounts. In the judgement of the finance minister, the effects from previous policies are on the wane.

He stated that economic agents have great confidence in Brazil's power of economic adaptation, adding that the goal now is to keep costs to a minimum and  implementing the adjustment quickly. “We also want to ensure social gains and strengthen the middle class,” he said.

Translated by Fabrício Ferreira