[ad_1]
The minister of economy, Paulo Guedessaid on Saturday that the central bank will “spill money over the entire economy” in the event of an economic depression caused by coronavirus.
Despite this statement, at a concert held by Itaú Unibanco (ITUB4), Guedes said that he believes that the Brazilian economy will have a “V” recovery, since the country’s vital economic signs have been preserved until now.
On Thursday, Congress passed a constitutional amendment separating additional spending and emergency measures to help address the impact of the crisis, giving the Central Bank the power to buy assets from the public and private sector.
In the event of a depression, Guedes said the BC could provide liquidity to companies and even small businesses.
“We will give away money throughout the economy if there is a depression,” if there is an infinite demand for liquidity, “he said.
So far, Guedes said, the Brazilian economy is more likely to experience a rapid recovery, driven by low interest rates. On Wednesday, the BC cut its benchmark rate Selic 0.75 percentage point to 3.00%.
He added that Brazil preserved 6 million jobs by launching a measure that allows workers to reduce wages and hours of work.
To boost the economy in the post-crisis, Guedes said the government can increase public spending on infrastructure, but that this would depend on the government being able to save resources in other areas.
Guedes took the opportunity to justify the president’s persistent criticism. Jair Bolsonaro to measures of social isolation of governors and mayors and their defense for the resumption of economic activity as “despair” in the face of what may happen depending on the next steps.
“This is not the time to have a fight, this is not the time, we have to be united, we are all Brazilians, I mean, now is really a time for us to be together to fight,” said Guedes.
“And even the fights that happen I interpret much more as the struggles of despair,” he added. “If everyone is locked up at home, the president (says)” for God’s sake, think of production, otherwise there will be a depression soon and it will get much worse. “
“It is much more a desperation of the president with the situation that can develop if we do not realize that we need both wings,” referring to health and the economy.
