October 1, 2022
Guedes says drop in GDP is local, but admits inflation fears - 02/12/2021

Guedes says drop in GDP is local, but admits inflation fears – 02/12/2021

Economy Minister Paulo Guedes said Thursday (2) that the sharp decline in the agricultural sector – 8% compared to the second quarter – is the main explanation for the result of the Brazilian GDP (Gross Domestic Product), Which fell for the second consecutive quarter, causing the country to enter a technical recession.

“It was a local decline, just farming. Industry is stable, trade is coming back,” he told the column. At the discretion of the Minister, the impact on the sector justified by weather conditions should not be repeated.

Guedes also mentioned that it is necessary to highlight the growth of investments in recent years and that this is a positive sign. “The investment rate is going up a lot, it’s already 19.4% of GDP,” he said.

Despite the optimism, the minister admitted that the high inflation scenario is worrisome. “We have a slowdown due to the fight against inflation as interest rates go up. This is slowing down and it’s an important factor,” he said.

Negative and limiting factors

In a statement, the Economic Policy Secretariat of the Ministry of Economy stated this Climate factors adverse to nature had an impact on the performance of economic activity.

“It is necessary to distinguish between economic policy and adverse and micro-climatic factors of nature,” the text says.

The department also says that “a 8.0% decline in agriculture on the margins produced an impact of -0.5% of the decline in GDP” and that if agribusiness result was zero-variance, GDP would grow by at least 0.3% in that time. a path.