Friday , May 7 2021

Economist Points 2019 lost and 2020 has been at risk



By Vittor Nozzi, Reda Brazil Etoile – Professor Antonio Correa de Lacarde, director of the Faculty of Economics and Administration (FEA) and former center of the BA program in political economy, is already in the process of losing and 2020 is an investigation. Of the Pontifical Catholic University (PUC-SP). "The state has to invest more to activate the economy, the opposite happens, and the economy has no way to react," he says.

For Lacarde, the speech of Minister Paolo Guedes has not changed since the election campaign: "reform" of the Social Security will foster the resumption of confidence and consequently, activity. "It has not worked anywhere in the world. This weak economy is connected to the fiscal realm."

The most recent data are a slight rise in inflation. The professor mentions that it affects the power consumption of families and puts more "firewood" of economic stagnation. In addition, the government does not present proposals for industry, to stimulate investment or reduce delinquency. Therefore, nothing indicates any reaction. "The economy, contrary to what the official discourse suggests, intervenes heavily on the recovery of trust, is in a very difficult situation."

Recent inflation data, if the IPCA, IPCA-15, released this week show some acceleration. Analysts seem to be updating their forecasts for growth this year. Unemployment remained high. In what we call the real economy, the feeling it gives is that nothing moves. Is this also your perception?

That's what happens. This novelty, let's put it this way, inflation is more fuel in the fire of this image of stagnation. Imagine the following: About a third of the economically active population, by IBGE data, is out of the labor market, if you join not only the official unemployment, which is 12, 13 million people, but discouraged, – nn, underutilization … In the market, what happens? The middle class, which is the main driver of consumption, has a very committed budget. You have the cost of living growing very intensively, you have an apartment, general expenses and services, school tuition, health plan is growing well above average inflation. This greatly affects the budget even of those employed. Companies, as well as many consumers, are in a state of default, with difficulty fulfilling their obligations. In other words, the consumption of families and companies is very limited. In those hours, in a classic way, what you need to be is a state action to act as an anti-cyclical policy. The state should invest more to run the economy. The opposite happens.

The speech is about a withdrawal from the economy.

exactly the opposite. What's going on? The economy remains without vectors responding. The first quarter is lost, it is zero, something negative, if it is positive it is only marginal. The second also shows no response. Then most likely in the first half will be lost in terms of growth. If the economy responds at the end of the year, it will be poor growth. We will also have stagnation, or at best performance very similar to what we had in 2018, 2017, but a lot due to agribusiness, ore, you have some residual growth. But the industry is going very badly, the trade is going very badly. The economy, contrary to what the official discourse suggests, resonates heavily on the restoration of trust, is in a very difficult situation. This will worsen the conditions of unemployment, the conditions of activity in general.

In the case of the economic team, we do not see proposals for unemployment, for example. The only clear proposal is the National Insurance Institute …

They mingle the following: Paolo Guadas's speech since the campaign, it s it. I'm going to make a national insurance reform, with this trust coming back, and trust will be responsible for the resumption of the economy. It did not work anywhere in the world. This agenda, which has been defined basically by the financial market, which put a lot of emphasis on the tax issue, which you must make the adjustment. But this is something that does not hold. Why? This weak economy we are talking about is connected to the tax area, which lives outside the tax collection. And what happens in a crisis? Drop the collection. Not only because economic activity is weak, but also because most companies have a huge difficulty paying taxes on time. You create a vicious cycle. In an attempt to make a match, you cut expenses, it creates more stagnation of the economy, and therefore, compromises collection. So it's a very limited government agenda. In this limited economic agenda, we are not talking about industrial policy, investment policy, recovery of defaulters. The result is bad economic development.

In case of inflation, until last year it was probably under control. There is always a precise rise at the beginning of the year, like education, but are you threatening to tear again?

There are factors associated with food, seasonal and also pressing factors. Brazil, as opposed to the current discourse of the presidents of the central bank, like any developing country has inflationary pressures. Inflation is only an expression of our inequality, regional differences, the oligopolization of the economy, the imbalance between supply and demand. We'll never be Switzerland. We will always have some inflation, which is probably around 4%, 5%. At some point …. But this structural inflation, flexible economic policies that are adopted. Especially because the real reasons do not deal, among them this oligopolization of the economy, very large power of the formation of prices. Inflation is another element that will act against the ability of the economy to respond.

Fuel policy can be food?

The exchange rate of fuels also affected inflation. And this requires a clearer policy to meet this challenge. Is a monopolist in a very concentrated field in the world, which has a great influence on the activity.

On industrial policy, we had a new plan for the automotive industry, but the industry does not even resent the interlocution?

Lack of a broader policy, including the concept of competitiveness, industry, trade, science and technology. There is an ultra-liberal view on the part of the economic team, which is very helpful. In fact, it goes against the grain even what is being done in the world. Countries have adopted a very clear industrial policy, including Germany, Japan, the United States, not to mention South Korea and China. Our economic agenda is very limited and does not contribute to recovery.

In the outer sphere, our chancellor has been more relaxed recently. But not those statements about globalization, cultural Marxism, a certain hostility to China, hurt the country in international trade?

It hurts, to mix ideological and commercial issues, which have to be more pragmatic. Of course, many of the international relations of the Bolsono government are going against Brazil's commercial and economic interests. And it affects our ability to introduce.

There were forecasts of growth of up to 2.5% this year, has been revised to 1.7%, Mr.. He said it would be poor. As the economy progresses, there will be no recovery this year. And the next?

The final recovery will not work on the roads that the government is feeding. This commitment to restore security will not be enough for everyone to respond. If this image prevails, stagnation will endure. We risk not having significant growth in 2020. This agenda will not suffice.

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