‘What’s the problem with energy getting a little more expensive?’

The increase in electricity bills has weighed heavily on families’ budgets and is one of the factors that pressures inflation, but Economy Minister Paulo Guedes does not see any problems in getting through the current moment.

If last year, which was chaos, we organized and crossed over, why are we going to be afraid now? What’s the problem now that energy will be a little more expensive because it rained less? Or the problem now is that it is having an exacerbation because the elections were brought forward… All right, let’s cover our ears, let’s cross.
Paulo Guedes, during the launch of the Parliamentary Entrepreneurship Front

“This will cause disturbance, push inflation a little higher, BC has to run a little more behind inflation,” he added.

Guedes said that the Brazilian economy is “coming in full force” after the crisis caused by the covid-19 pandemic, but admitted that “there are, yes, clouds on the horizon”. “We have a strong water crisis ahead, but the Brazilian economy is breaking the waves,” he acknowledged.

The water crisis led the government to announce this Wednesday, 25, measures to reduce energy consumption for the entire federal public administration. Presidential decree issued today determines the reduction of electricity consumption of these bodies between 10% and 20% in relation to the monthly consumption in the years 2018 and 2019, that is, before the pre-pandemic period.

In addition, the government is asking society and industry to make an effort to save energy and avoid waste. Those who save will have a smaller bill to pay and an award for reducing consumption.

Pressured by the increase in the electricity bill, inflation accumulated in 12 months reached the double-digit mark in four capitals of the country in the IPCA-15 of August: Porto Alegre (10.37%), Goiânia (10.67%), Fortaleza (11.37%) and Curitiba (11.43%). The data were released by the Brazilian Institute of Geography and Statistics (IBGE) this Wednesday, 25.

During the ceremony, Guedes presented data on the Brazilian economy, highlighting gains from the reforms made to control spending. “In the very first year (of government), we showed that we came to control public expenditure,” he said.

According to him, the “fiscal abyss that threatened Brazil was controlled”, highlighting the Social Security reform. And, despite the covid-19, the Brazilian economy is opening up again, “we have a record trade surplus and current trade,” added the minister.

strong collection

Guedes also highlighted the good performance of tax collection, and predicted that “if the Brazilian economy grows 5.5% this year, with the collection coming in strong, it is possible for the country to have a surplus in 2022”.

This Wednesday, the Internal Revenue Service released data for July, when the country collected R$ 171.270 billion with federal taxes and contributions, a real increase of 35.47% compared to the same month in 2020.

“The economy is booming and the narrative continues that the government does nothing,” said the minister. He criticized what he called denial views and thanked Congress for its efforts in approving the reforms and measures put forward by the government. Guedes also highlighted the performance of the president of the Chamber, Arthur Lira (PP-AL), who, according to him, is an “essential leader”.

According to Guedes, critics have already transferred the collapse to 2022, realizing that the economy has started to grow again. “But we’re going to keep growing,” he said.