BRASILIA (Reuters) – Economy Minister Paulo Guedes said on Friday that the consolidated public sector ended 2021 with a small surplus, arguing that the country returned to fiscal control after adopting measures to combat the pandemic.
“The deficit came from 1% of the Gross Domestic Product (GDP) to 10.5% (in 2020) and we ended the year (last year) with a small consolidated surplus”, he said.
Official data for the consolidated public sector primary result in 2021 have not yet been presented. The disclosure by the Central Bank is scheduled for the 31st.
In a virtual event of the World Economic Forum, the minister reiterated that the government did not allow emergency spending to face the health crisis to become permanent expenses.
Guedes stated that the Ômicron variant is still spreading, but with an indication that it is less severe. Without detailing specific measures, he stressed that Brazil has a protocol for situations of this type and is ready to attack.
According to him, the country has fiscal and monetary space to react in the event of a new wave of Covid.
Guedes said he believes that the inflation currently observed in the world is not a transitory phenomenon. In the minister’s assessment, supply shocks will end, but Western countries will no longer be able to do the arbitrage observed in recent decades, when, according to him, millions of Eurasians left poverty and joined global labor chains.
“Central banks are sleeping at the wheel”, he said, before stating that the world is back in a situation of synchronized deceleration, now with inflation.
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