The Brazilian Finance Minister Guido Mantega, assured today that the country is poised to grow and face “to the worst” scenario resulting from the European crisis.
“We have financial resources, fiscal resources. Brazil is fully prepared to face up to the worst. And we will grow in any way,” Mantega said in an interview to daily Folha de Sao Paulo and the portal UOL, published today in their respective websites.
The government economic official noted that Brazil has twice the foreign exchange reserves and better fiscal situation in 2008 and predicted that this crisis will be “softer” than that year.
Mantega said the government has tools to deal with a “holocaust” as one might suppose that Greece leave the euro “so disorganized” which could “cause an outflow of capital from various countries” and “block trade”.
In his opinion, Brazil has lines of credit and market sufficient to counter the hypothesis that these problems occur.
In the same vein, he argued that Brazil will continue to grow through the expansion of the middle class, increased consumption and employment generation, so pointed that suggest a possible depletion of this model “is a theoretical boldness.”
The government estimates that the Brazilian economy will grow between 3.5% and 4.0% this year, “if that does not deteriorate the international crisis.”
The minister also said that the country is ready to reduce rates further interest rate without causing inflationary pressures.
He also ruled that the appreciation of the Brazilian currency, the real, experienced in recent months will cause “significant impact” on prices.
Mantega said that oil and other commodities are on a downward trend that “neutralizes” the inflationary pressure recorded by the rising costs of imported products.
The dollar was trading at the end of March to 1.82 reals and this week at a time of high volatility, reached a ceiling of 2.08 units of the Brazilian currency.
The greenback was trading at the close on Friday to 1.99 reais in commercial exchange, a level that is “more favorable to Brazilian manufacturing output,” which gains competitiveness in international markets.