Brazilian economy in 2022 is better than expected, says professor

The Brazilian economy grew 1.2% in the second quarter of 2022, according to the IBGE (Brazilian Institute of Geography and Statistics), and the figure is above the expectation that economists had at the beginning of the year, which was 0.5%. Today, the stakes are around 2%.

Thus, in an interview with CNN Carlos Primo Braga, former director of the World Bank and professor at Fundação Dom Cabral, said that the Brazilian economy in 2022 is better than expected.

He points out that some of the motivators for the GDP result were: the fiscal expansionism policy, that is, the PEC of precatories; and measures in relation to the guarantee fund, be it the anticipation of the thirteenth salary.

However, as for the future, the analyst says that regardless of who is elected, he will find a fiscal situation that is extremely worrying in 2023.

“If we look, for example, at the issue of increasing emergency aid, which is not in the budget – but that the two candidates who are at the top of opinion polls for the elections say they will keep the R$ 600 – that’s all, there is a significant cost, which will be practically in the order of R$ 60 billion. If we add that too, with the hypothesis of an 18% readjustment of the civil service and also the whole issue of maintaining tax exemptions, such as PIS/Cofins, etc. All this gives a sum of around R$ 160 billion.”

“This is plus one minus the value we currently have in the government for discretionary measures. At the end of the day, this means that money for investments, for example, from the public sector will be practically nil”.

Primo Braga’s expectation is that the Brazilian economy in 2022 will be better than in 2023.