Brazil’s Minister of the Economy sees 5% GDP growth this year and a budget surplus in 2023
By Jamie McGeever and Gabriel Ponte
BRASILIA, May 25 (Reuters) – The Brazilian economy could grow by 5% this year, Economy Minister Paulo Guedes said on Tuesday, adding that the government could eliminate its budget deficit and switch to a surplus as early as 2023.
At an event hosted by BTG Pactual bank, Guedes took on a typically bullish tone, insisting that strong growth in formal employment, an expected acceleration of COVID-19 vaccinations and resumption of reforms economic growth in Congress will turn cyclical economic rebound into sustainable growth.
“This is the big challenge that awaits us, and Brazil is showing that it will get there … with growth of 4.5% to 5% this year,” Guedes said.
The government’s official growth forecast for this year is 3.5%, but a series of bullish economic indicators recently prompted many private sector economists to raise their outlook to 4% and above.
Guedes said Brazil is on track to create 1 million formal jobs this year and on track to hit the 2 million mark fairly quickly.
Just as formal job growth has reached record levels in recent months, so has federal tax revenues. At the current rate of inflows into government coffers, Brazil’s primary budget deficit could tip into a surplus as early as 2023, Guedes said.
“Our previous calculations were that we wouldn’t generate a surplus until 2027. It has already moved into 2024, and at the rate that tax revenue is coming in, it may be even earlier, in 2023,” he said. declared.
Guedes stressed the government would spend whatever it takes to tackle the public health crisis caused by COVID-19, but insisted it would pay all of its bills.
He also said that the government is studying a negative income tax and is putting in place a package of measures to fight unemployment. Official figures later this week are expected to show that the official unemployment rate hit a new high of 14.7% in the three months leading up to March.
(Reporting by Jamie McGeever and Gabriel Ponte; Editing by Leslie Adler and Sam Holmes)
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