Alckmin defends expansion of trade with Latin America

The acting president, Geraldo Alckmin, defended the expansion of trade between Brazil and Latin American countries, as only 26% of transactions are intra-regional. “In the world, although globalized, trade is tremendously intraregional”, he said, this Wednesday (12), at the opening of an event held by the Brazilian Association of Infrastructure and Basic Industries, in Brasília.

According to him, trade between the United States, Canada and Mexico is 50% between them. In the European Union and Asia, these numbers rise to 60% and 70%. “We have to start with the neighbors, then, make a great commercial effort in the region, which is where we sell trucks, cars, buses, auto parts, white goods, value-added products,” said Alckmin.

For this reason, according to him, President Luiz Inácio Lula da Silva began his international participation in this third term by traveling to Argentina and Uruguay. Afterwards, he was in the United States, which is the biggest investor in Brazil, and now he is in China with the expectation that more than 20 agreements are signed with the Asian country.

Reforms in the economy

According to Alckmin, the government is optimistic with the approval of the fiscal framework and, subsequently, of the tax reform to leverage investments in the country. For the vice president, who is also the Minister of Development, Industry, Commerce and Services, Brazil had an early and worrying de-industrialization but, with the measures, it can recover competitiveness.

As package of fiscal measureswhich has yet to be sent to Congress, the government seeks to ensure credibility and predictability for the economy and for the financing of public services such as health, education and public safety.

“The new fiscal anchoring is smart because it establishes rigor in public spending, the debt curve will fall, and on the other hand it is countercyclical, that is, when the economy grows very strongly you have a spending ceiling and the weaker you are has a floor to help leverage economic activity,” he explained.

Still according to Alckmin, the role of credit is extremely important in this scenario and that it should be boosted with the reduction of interest rates from the improvement of expectations with the country’s fiscal policy.

“Three things are impacting: interest, tax and exchange rate. The exchange is good, it just needs to be stable, but it’s competitive. The tax will improve with the tax reform, it will not fall, but it will simplify and will stimulate productive activity. And credit, I am confident that we will introduce a gradual reduction in the Selic rate with fiscal anchorage, providing better credit, in addition to seeking other ways to support credit, especially with guarantee funds”, said Alckmin.

The acting president pointed out that the deceleration of inflation should impact the Central Bank’s decisions on monetary policy and the Selic level, the basic interest rate. The Extended National Consumer Price Index (IPCA), which calculates the country’s official inflationreached 0.71% in March, slowing down compared to February, when it was 0.84%, and reaching the lowest level since January 2021.

“We want inclusive development with sustainability and stability. And inflation is not socially neutral, it takes from the poorest and passes to the richest. So, the drop in inflation is very important and will help with monetary policy, which is reducing the cost of money, a fundamental factor for economic activity, ”she said.