The trade war opened by the United States could have deleterious effects on the growth of the world economy, said this Wednesday the Minister of Finance, Fernando Haddad, considering that he does not see any risk of recession in Brazil.
At an event hosted by CNN Brasil, Haddad stated that the conflict between the United States and China is not sustainable and that the escalation of the tariff dispute between the two countries should not continue.
“It is hard to believe that the tariffs imposed mutually on the two countries will remain in place. It is something that, in my opinion, would greatly disrupt global production chains,” he said.
US President Donald Trump has suspended raising tariffs on other countries. However, he announced new increases specifically targeting China. In response, the Chinese government has also imposed heavier tariffs on US goods.
“I don’t see any risk of recession in Brazil. Obviously we are looking at the current situation and we have to see how geopolitical tensions will settle down,” said the minister.
Haddad maintained his previously presented forecast that the Brazilian economy should grow around 2.5% in 2025, slightly below previous years, in a slowdown that he attributed to the Central Bank's interest rate hike to contain inflation. The official estimate from the Treasury is for growth of 2.3% for this year.
Credit, debt and challenges in the real estate sector
Asked about the risk of increasing family debt with the program designed to stimulate loans granted to private workers, Haddad said that the government's actions have boosted credit with lower rates.
In this area, he stated that the government still “is in debt” for a solution for the secondary real estate credit market. He highlighted that the increase in the Selic rate has postponed plans in this area, making it difficult to implement the planned measures.
In April 2024, the government issued a provisional measure authorizing the Asset Management Company (Emgea) to use its cash to capture real estate financing portfolios from banks and transfer them to other institutions in the secondary market, but the plan did not move forward.
The president of the Central Bank, Gabriel Galípolo, has also stated that the agency is discussing solutions to expand the sources of funds for real estate financing. These discussions are taking place amid withdrawals observed in savings accounts. Savings accounts are an important source of funding for these loans.
At the event this Wednesday, Haddad also defended the government's proposal to charge a minimum tax on wealthier people to compensate for the increase in the Income Tax exemption for those who earn up to R$1,04,050.
He stated that he has not yet discussed the project in detail with the rapporteur of the matter, Congressman Arthur Lira (PP-AL). He emphasized, however, that the Treasury will provide technical support. This support will be directed to discussions of the text in the National Congress.
Source: Bernardo Caram | Notícias Agrícolas
