Brazil Finance Minister rules out 2027 recession, eyes new growth

Brazil's Finance Minister Dario Durigan rejected recession fears for 2027, attributing them to political motives. He believes lower interest rates from the Central Bank could trigger a new phase of economic growth and an economic "boom".

Brazil's Finance Minister Dario Durigan ruled out the possibility of the country's economy entering a recession in 2027, saying Brazil could instead witness a fresh phase of economic growth if the Central Bank lowers interest rates.

Speaking in an interview with Radio Jornal in Pernambuco, Durigan dismissed predictions of a recession as exaggerated and suggested that such claims appeared to be politically motivated in an election year.

Debt Management and Fiscal Discipline

Durigan said Brazil's public debt remains under control despite being at a level considered relatively high. He argued that the country's debt burden is influenced more by the prevailing level of interest rates than by the government's fiscal results. According to the minister, reducing borrowing costs would help improve economic activity and create conditions for stronger growth, as reported by Brasil 247.

The finance minister also stressed the need for the government to introduce fiscal adjustment measures focused on reducing mandatory public expenditure while creating additional room for productive investments. He said the government should present the details of these measures before next year to reinforce fiscal discipline and strengthen confidence in the economy. "The best way for the government to address this problem is by making fiscal adjustments, correcting public accounts and seeking greater efficiency in public spending," Durigan said. He added that improving the quality of government expenditure is essential for ensuring long-term economic stability.

US Trade Relations

On trade, Durigan criticised the tariffs imposed by the United States on Brazilian products under the Trump administration, describing them as "completely absurd". He said he expects to present Brazil's arguments against the tariff measures to US Treasury Secretary Scott Bessent during a likely meeting on the sidelines of the G20 summit in the United States next month.

Expressing optimism, Durigan said he believes the tariff dispute could be resolved after the elections. He maintained that a combination of lower interest rates, responsible fiscal management and higher investment could pave the way for a new economic "boom" rather than the recession forecast by some analysts.

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