Former Central Bank President Roberto Campos Neto recently participated with the incident of farm capital in São Paulo, where he made considerations about the domestic and global economic scenario. In the evaluation of the former central bank, Brazil is “well positioned” in relation to US President Donald Trump’s customs policy and must maintain a ton of neutrality with the White House and seek negotiations.
“Brazil is not the focus of the problem that the United States sees. I think Brazil has done a good job,” said the former BC president. “Brazil must be as neutral as possible and not go into this fight,” he changed.
Among the possible consequences of the US and China trade war for the country, Campos Neto mentioned that there may be an “invasion” of Chinese products in Brazil, given the closure of the US market. “This gives faulty pressure,” said the previous BC, and punctured that it is necessary to analyze the effect this movement will provide the national industry.
Still on customs, Campos Neto said that, according to economic literature, it is difficult to believe that the effect of measures like this is to encourage the local industry in the country that raises customs or increased collection.
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When he designed a broader overview of Brazil, Campos Neto considered the departure to the country, among other things, through a “positive shock” in fiscal policy. In this area, he claimed that there must be a review of social spending from, for example, mechanisms that guarantee a “output door” to the recipients of certain programs. “We need a review of the size of the public machine, with digitalisation that generates efficiency in order to spend less,” he added.
The former BC president also pointed out that global inflation that was observed during the period after the pandemic was a much more linked problem to the heating of demand due to the expansion of the payment of social benefits than is concerned.
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Campos Neto also said that he could not comment on the latest decisions on Brazilian monetary policy, because he is in the quarantine period after leaving the municipality’s command, but that the monetary authority has done a “correct work” in the short term.
When asked how he evaluated the economic policy of Argentina’s president, Javier Milei, Campos Neto pointed out that the neighboring country’s agent chose a “strong and unpopular” adjustment, but it seems to be on the right track and can start working. “There was a very strong contraction of the economy last year, but in the end it now seems that it is going up,” said the former central banker, however noted that Argentina still has questions to be solved, especially the exchange balance.