Brazil sees no risk of recession in 2027, says finance minister Durigan
São Paulo, July 28
Brazil's Finance Minister Dario Durigan ruled out the possibility of the country's economy entering a recession in 2027, saying Brazil could instead witness a fresh phase of economic growth if the Central Bank lowers interest rates.
Speaking in an interview with Radio Jornal in Pernambuco, Durigan dismissed predictions of a recession as exaggerated and suggested that such claims appeared to be politically motivated in an election year.
Durigan said Brazil's public debt remains under control despite being at a level considered relatively high. He argued that the country's debt burden is influenced more by the prevailing level of interest rates than by the government's fiscal results.
According to the minister, reducing borrowing costs would help improve economic activity and create conditions for stronger growth, as reported by Brasil 247.
The finance minister also stressed the need for the government to introduce fiscal adjustment measures focused on reducing mandatory public expenditure while creating additional room for productive investments.
He said the government should present the details of these measures before next year to reinforce fiscal discipline and strengthen confidence in the economy.
"The best way for the government to address this problem is by making fiscal adjustments, correcting public accounts and seeking greater efficiency in public spending," Durigan said.
He added that improving the quality of government expenditure is essential for ensuring long-term economic stability.
On trade, Durigan criticised the tariffs imposed by the United States on Brazilian products under the Trump administration, describing them as "completely absurd".
He said he expects to present Brazil's arguments against the tariff measures to US Treasury Secretary Scott Bessent during a likely meeting on the sidelines of the G20 summit in the United States next month.
Expressing optimism, Durigan said he believes the tariff dispute could be resolved after the elections.
He maintained that a combination of lower interest rates, responsible fiscal management and higher investment could pave the way for a new economic "boom" rather than the recession forecast by some analysts.
— ANI
Reader Comments
The tariff dispute with the US is concerning. As a developing economy, Brazil needs fair trade terms. Hope Durigan's meeting with the US Treasury Secretary yields results. India has faced similar challenges in trade negotiations, so I sympathize with their position.
Durigan's optimism is noted, but calling recession predictions "politically motivated" seems like a deflection. Every country wants lower rates and growth, but without concrete fiscal adjustment measures, this sounds like wishful thinking. Let's watch the data.
Brazil's situation hits close to home. We've seen how high interest rates can choke growth. Durigan is right that fiscal discipline must accompany rate cuts. It's a balancing act - cut too fast, inflation rises; too slow, recession looms. Hope they find the sweet spot.
Durigan's emphasis on "quality of government expenditure" is key. Too often, governments focus on cutting spending without addressing efficiency. Brazil's path to growth depends on smart investments, not just lower rates. We should take notes. 🤔
A "new economic boom" sounds promising, but elections often lead to optimistic rhetoric. Durigan needs to back words with action. Reducing mandatory spending and boosting investment - easier said than done. Best of luck to Brazil! 🙏
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