“Blessed inheritance” of reforms helps to “breathe” the economy

The expected reduction in the basic interest rate (Selic) by the Central Bank reinforces a period of “breathing” for the Brazilian economy – with a reduction in inflation projections, expectations for GDP much better than those at the beginning of the year and even an improvement in the rating country’s credit rating by the risk rating agency Fitch.

In addition to conjuncture issues, this favorable moment is also related to the consolidation of a “blessed legacy” of reforms promoted in the last six years.

Alberto Ramos, executive director of Goldman Sachs for Latin America recalls the “blessed inheritance” in the fiscal aspect. “We had already had two years with a surplus, an unprecedented fact in recent decades”.

For Hélio Beltrão, president of the Mises Brasil Institute, “little by little the country is reaping the fruits of excellent consolidated micro and macroeconomic adjustments”. Among them are the labor reform, in the Temer government, and initiatives of the Bolsonaro government such as the pension reform, the Economic Freedom Law and other liberalizing actions.

In the same vein, the Fitch agency attributed Brazil’s “above-expected macroeconomic and fiscal performance” to proactive policies and reforms in recent years.