"The exchange rate is fundamental to solving several economic problems," says Mantega.

247 - Former Finance Minister Guido Mantega stated that the Central Bank's monetary policy and the excessive appreciation of the dollar have been key factors in the slowdown of the Brazilian economy and high inflation. This was in an interview on the program... good night 247Mantega warned that rising interest rates and credit restrictions are expected to negatively impact growth in 2025, while exchange rate volatility continues to put pressure on prices in Brazil. The former minister also criticized the performance of the former Central Bank president, Roberto Campos Neto, and highlighted the effects of former US President Donald Trump's policies on the global economy.

High interest rates and restricted credit are hindering growth.

Mantega highlighted that, despite the significant economic growth in 2024, the Brazilian economy began to slow down in the last quarter of the year, registering a GDP increase of only 0,2%. According to him, this movement was already expected due to the escalation of interest rates.

"The economy is experiencing an interest rate shock. The Selic rate is already at 13,25% and is projected to rise to 14,25%. This is an extremely high interest rate, which tends to stifle growth," he stated. He warned that credit restrictions are expected to affect consumption and investment in 2025. "Credit grew 11% in 2024, but banks are already projecting an expansion of between 4% and 8% for this year, which is very little. This means less financing for businesses and consumers, hindering investment and job creation," he explained.

The former minister criticized the Central Bank for maintaining a high interest rate policy, which makes credit more expensive and discourages economic activity. "If the Central Bank insists on keeping interest rates high and does not act to control the appreciation of the dollar, the impacts will be negative for the economy," he said.

The exchange rate as a factor of inflationary pressure.

Mantega pointed out that inflation closed 2024 at 4,83%, within a reasonable level, but that there are projections for an increase in 2025. "The market projects inflation of 5,6%, but I don't believe that this number will materialize if there is adequate control of the exchange rate," he stated.

He highlighted that the behavior of the dollar has been crucial for price stability in Brazil. "What most impacts inflation in Brazil is the fluctuation of the dollar. When the real appreciates, there is a deflationary effect because imports become cheaper and reduce costs for the economy. The opposite is also true: if the dollar rises, the prices of imported products and inputs increase, putting pressure on inflation," he explained.

The former minister criticized the Central Bank's actions in 2024, which, according to him, contributed to exchange rate instability. "Last year, we had a significant increase in the dollar starting in April and May, driven by statements from the then-president of the Central Bank, Roberto Campos Neto. He began talking about fiscal disarray and created an environment of panic in the market, which led to the artificial appreciation of the American currency," he criticized.

Mantega argued that the government must act to prevent an excessive appreciation of the dollar. "The Central Bank has mechanisms to contain speculation against the real and needs to act more firmly to avoid distortions in the exchange rate," he stated. He emphasized that in the first months of 2025, there was a recovery of the real, but that international turbulence has once again put upward pressure on the dollar. "In recent days, the dollar has risen again due to the madness of President Trump, who is promoting global economic disorder. This ends up having a direct impact on Brazil," he warned.

Trump and the global economic disorder

The former minister highlighted that Trump's protectionist policies and erratic stance have generated instability in international markets. "We have never seen a character like Trump in the international economy. He is creating great confusion that directly affects the United States and generates global repercussions," he stated.

Among the recent measures taken by the former US president, Mantega cited the increase in tariffs on Brazilian steel. "This was already expected, but the question is whether he will extend these restrictions to other sectors. If he makes it more difficult for the US to export agricultural products to China, Brazil could benefit by occupying that space, but that's still speculation," he considered.

He also warned of the risks of a recession in the US if Trump goes ahead with all the announced measures. "If he implements these protectionist policies, the American economy could slow down and domestic inflation could rise. This would generate a negative reaction from the financial market, which has already registered significant losses in recent weeks," he analyzed.

The role of the Central Bank and the challenges for 2025

When addressing domestic economic policy, Mantega criticized the Central Bank's actions and accused the institution of working against the country's growth. "Today we have an independent Central Bank, but one that inherited a disastrous policy from the previous government. Roberto Campos Neto was a staunch Bolsonaro supporter and adopted measures that harmed Brazil," he stated.

According to the former minister, the Central Bank's strategy in recent years has been to raise interest rates excessively, even when the Brazilian economy showed signs of recovery. "They realized that the economy was doing well and that the government could reap the benefits. So, starting in April and May 2024, they began to spread panic, creating a consensus that it was necessary to raise interest rates," he criticized.

Regarding the outlook for the coming months, Mantega said that the trajectory of the Selic rate will be decisive for the resumption of growth. "If the Central Bank stops raising interest rates and allows a gradual decrease, we could see a stronger recovery in 2025," he explained.

Finally, he reinforced the importance of tighter exchange rate control to avoid further inflationary pressures. "The government needs to bet everything on strengthening the real to control prices and allow for a less restrictive monetary policy. This would help reduce inflation without the need to keep interest rates at such high levels," he concluded. Watch: