Economy Minister: unemployment to fall to 8% before end of the year

Brazil´s unemployment rate, which currently stands at 9.3 percent, could drop to 8 percent before the end of the year due to the economic recovery, Economy Minister Paulo Guedes said. He participated on Tuesday (Aug. 9) in the opening ceremony of the congress of the Brazilian Association of Bars and Restaurants (Abrasel), in Brasília.

“We are going to end the year with the lowest unemployment rate we have seen in the last 10, 15 years,” the minister stated.

In Guedes' assessment, Brazil is entering a long investment cycle. The Brazilian economy is in a better situation than that of developed countries, which are entering a recession, and that of other Latin American countries, which are “desmantling”, in the minister's words.

According to the government´s statistics agency IBGE, the unemployment rate reached, in the second quarter of the year, the lowest level for the period in seven years. Guedes attributed part of the recovery of the job market to the improvement of the business environment, with the reduction of bureaucracy. “Brazil is in a long growth cycle. We have created a business environment that already has contracts worth BRL 890 billion,” he stressed.

Debt

As the minister has been saying lately, unlike other countries, Brazil has gone through the pandemic without exploding public debt. In 2019, according to him, the gross debt of the general government stood at 74.3 percent of the Gross Domestic Product (GDP). Due to extra expenses related to the pandemic, it reached 88.8 percent in 2020. Through the recovery of the economy and the increase in revenue, gross debt has fallen and it currently corresponds to 78.2 percent of the GDP.

OECD

Guedes pointed out that due to the fact that the Organization for Economic Cooperation and Development (OECD) had approved Brazil's accession plan, European companies began to express interest in investing in the country after the beginning of the war between Russia and Ukraine.

Guedes said he had spoken with a French minister (without mentioning his name) and asked that Europe open the market to Brazilian products. “Our trade with you [Europe] was $2 billion dollars at the beginning of the century, and with China $2 billion dollars as well. Today, we trade with you $7 billion and with China $120 billion,” Guedes told the French government representative.