Boldness and reality

Brazil holds a leading position in rankings that saturate society with apprehension and fear. We are at the top of the world when it comes to real interest rates. In a survey of 40 major world economies, Brazil holds the title of champion with the highest real interest rate in the globe, followed by Russia, Colombia, China, and Mexico.

This uncomfortable podium stifles the accelerator of investment and strangles the engine of growth. Any entrepreneur with resources will prefer a short-term investment to injecting their resources into the so-called real economy, creating new investments, betting on new plants, and generating jobs. This notoriously vicious cycle needs to be boldly altered so that the car can once again move at the speed everyone desires.

It is imperative that, despite the interest rate cut announced this Wednesday, the second in 2017, this dynamo be accelerated in order to allow us to resume investments, growth and, consequently, the expansion of employment, the only meaningful and truly relevant factor for society. And it is in this area of ​​unemployment, although we are not in pole position, that our greatest anxieties lie. There are almost 22 million Brazilians unemployed or underemployed.

Inflation has been falling and interest rates have been falling hand in hand, but they could fall even further and faster. Interest rates are falling in the same proportion as the decrease in the cost of living, maintaining a stable relationship between the two.

There are economic indicators signaling that we have emerged from the worst of the recession, allowing us to combine boldness with realism, without the former obscuring the latter. In addition to the sharp drop in inflation, we have also already applied the handbrake on public spending limits. Without risk, with fiscal honesty, in the coming months more than R$ 50 billion will be migrating from the inactive storage of the Severance Indemnity Fund accounts to circulate in the streets and accelerate the pedal of the domestic economy.

At the same time, at the proposal of the Federal Senate, we are allowing a second round of asset repatriation that could inject another R$ 30 billion into the domestic economic engine. We must take advantage of this surge of new resources circulating in our economy to boost growth and forget the recessionary accident that affected everyone indiscriminately.

The new resources lubricating the domestic economy, the brakes on public spending, and the progress of structural reforms in the National Congress, which will inevitably be modified, help to correct and improve another essential mechanism of the economic machine: confidence, which has been very erratic until now due to several past missteps.

Therefore, while praising the economic team's restraint in monetary policy, I am convinced that we must accelerate this race against recession without euphoria and reach single-digit interest rates as quickly as possible.