In a statement made today (Aug 11), Brazil's Central Bank President Ilan Goldfajn said that the latest indicators signal stabilization and the opening of the path towards the country's economic recovery.
“After two years of recession, recent data seem to confirm the base scenario we work with here at the Central Bank. It's been stabilized, recession was left behind, and gradual recovery lies on the horizon for the next months,” he said while speaking at a Central Bank seminar on financial stability.
In addition to the good results, Goldfajn mentioned the increase in the employed population for four consecutive months. Late in July, he pointed out, the Brazilian Geography and Statistics Institute (IBGE) reported the first significant decline in the unemployment rate since 2014—a reduction of 0.7% in the economically active population without a job. According to the survey, the unemployment rate stands at 13%.
“The same holds true with the industrial output,” he added. “We've had two quarters of growth in a row, which hadn't happened since 2014.”
Goldfajn also believes that interest should lower even further for consumers in the upcoming months, followed by cuts in the SELIC, Brazil's benchmark interest rate. “It's falling gradually, of course, and I don't think it's going to change for the next months. There's a natural gap between the cut in the benchmark interest rate and the decline in the bank rates,” he noted.
At the last meeting of the Monetary Policy Committee (COPOM) of the Central Bank, in July, the SELIC was reduced by one percentage point to 9.25% a year. The revision brings the rate the lowest level since October 2013, when it stood at 9%.
Translated by Fabrício Ferreira