Brazil under exaggerated economic pessimism, says Finance Minister

In a statement made today (May 26), Brazil's Finance Minister Henrique Meirelles said an atmosphere of exaggerated pessimism has set in in the country. “We tend to share an exaggerated optimism at certain moments when all news is good—which is not a good thing, because we jump to conclusions. At some moments, an exaggerated pessimism can be just as harmful. Keeping calm and aiming for balance are key in situations like this,” he argued.

In his view, Brazil is discussing and approving major overhauls, such as the pension and labor reforms, the spending cap law and the governance of state-controlled companies, which are bringing the country back on the track towards growth. “It's a moment when balance is particularly important,” he stressed.

Meirelles took part in the 89th National Construction Industry Meeting (ENIC) today in Brasília. He showed executives economic data and highlighted the positive outlook for the Brazilian economy. In his view, the political crisis facing President Michel Temer's administration in the last few weeks will not pose an obstacle to how the country has grown or to the approval of reforms and bills. “This has become more and more relevant countrywide. My thesis is that [Temer's administration] is to carry on,” he said.

The stabilization of the economy, coupled with the reforms, Meirelles argued, will provide the country with the necessary conditions to tackle the crisis and resume growth at a yearly average of 2.3% in the upcoming years. “The microeconomic reforms we're also proposing and the decrease of the size of the state, will enable us to increase this potential growth rate for the next years perhaps somewhere between 3.5% and 4%. Then we'd be able to see some robust growth ahead,” he explained.

Translated by Fabrício Ferreira