Guido Mantega: Campos Neto is dropping an atomic bomb on the economy.
The economist and former Finance Minister also believes that the government should submit a request to remove the president of the Central Bank from office.
247 - Economist and former minister Guido Mantega, who led the Brazilian economy during the period of greatest prosperity and social inclusion in Brazil's history, gave an interview to journalist Leonardo Attuch, editor of TV 247, and harshly criticized the president of the Central Bank, Roberto Campos Neto. “A drop in interest rates wasn't expected, but a reduction was expected soon. The Brazilian interest rate is the highest in the world, but our inflation isn't. Today, 90% of countries have negative interest rates. Don't the people at the Central Bank know how to do calculations? Inflation is under control in Brazil,” he said.
Guido also said that this year's inflation target, close to 3%, will not be achieved because it was an absurd target. It was poorly defined. "Inflation in Brazil is not demand-driven, and the Central Bank is using the wrong remedy," he stated. He added that Minister Fernando Haddad is seeking an understanding, but assessed that it may be time to confront the monetary authority more directly. "Maintaining this interest rate is an atomic bomb for the Brazilian economy. The Central Bank is trying to impose itself on the President of the Republic, and the government should move towards the removal of Roberto Campos Neto. Especially since the Senate is also responsible for the country's economic results," he said. "The Lula government cannot fail and cannot remain with Campos Neto for two years," he added.
In the interview, Guido highlighted that President Lula's main fiscal policy was economic growth, which increased formal employment and tax revenue. "Business owners should be concerned with growth, but they don't want wages to increase. We have a backward and predatory form of capitalism in Brazil," he lamented.
The former minister also said that the political cost of a recession would be very high for President Lula and recalled that Lava Jato destroyed Brazil's major construction industry. "The ten largest companies were bankrupted, and Lava Jato paralyzed the country's largest production chain," he pointed out. "Under neoliberalism, Brazil will be condemned to eternal stagnation," said the former minister, who also stated that China could invest heavily in Brazil, commenting on the mission led by President Lula.