Rio de Janeiro – The executive director of the International Monetary Fund (IMF), Paulo Nogueira Batista, who represents Brazil and ten other countries at the organization, has said this Thursday (26th) that Brazil’s macroeconomic foundations are reasonable, and that the issue that warrants the most attention is the country’s current account. <\/p>\n
“The fiscal [foundations] are quite reasonable, so is the monetary policy, and financial system regulation is good. On the foreign front, current account deterioration is a bit worrisome, but reserves are high and so is FDI influx. So, I would say things are reasonable. I believe we must keep an eye on [the current account], because it is no good to run too high a current account deficit. This is concerning, but not alarming,” said Batista, stressing that this is his own opinion and not the Fund’s.<\/p>\n
Batista took part in the seminar Financial Governance After the Crisis<\/em>, held by the Multidisciplinary Institute on Development and Strategie (Minds) and the Levy Economics Institute.<\/p>\n Regarding the report by the British magazine The Economist <\/em>, titled Has Brazil blown up? <\/em> ,which hit the newsstands this Thursday, questioning whether the country’s economic policy has failed, after having succeeded in the past few years, Batista believes the country is gradually recovering. <\/p>\n “Brazil experienced a period of great success, it was trendy and it was as landmark. Things were even overblown at that time, up until 2011. Now, the reassessment is darker and it is going on the opposite direction. I believe Brazil is growing at a lesser rate than it could. In actuality, the slowdown seen in 2011 was both desired and planned by the federal government, because there was the accurate perception that in 2010, the country was overheating. Deliberate measures were taken to slow down the economy, and that caused the growth rate to decline, which came as no surprise. The actual bad surprise was the difficulty rebounding in 2012 and 2013. But I believe that now we are experiencing a more clear-cut recovery, though still tentative, but the figures are showing that the economy is picking up,” he said.<\/p>\n On a positive note, the IMF director cited the strength of Brazil’s labour market, which has repeatedly posted good results despite the world economic crisis, which may be a sign of recovery. “The labour market has been a good surprise during all this time. Despite the economy’s sharp slowdown, the labour market remains strong. The unemployment rate is fairly low and wages are still rising. The performance is not as favourable as expected, but I think a recovery is on its way,” he added.<\/p>\n *Translated by Gabriel Pomerancblum<\/strong><\/p>\n