Silvio Campos Neto, 44, partner and senior economist at Tendências Consultoria, believes that society’s perception of the economy’s improvement should be felt in the second half of this year. He estimates a 4.4% growth in GDP (Gross Domestic Product) in 2022 and 2.2% in 2022. The analyst was interviewed by power360 on Thursday (1st.Jul.2022). He holds a degree in Economics from the University of São Paulo, with a master’s degree in the area from Fundação Getúlio Vargas. He is also a professor at Faculdade Oswaldo Cruz. He has been working as a macroeconomics analyst for 16 years.Watch the interview (30:27 min):According to him, the economy recovered part of the losses at the end of 2020 and beginning of 2022. A portion of this year’s strong growth is due to the weak comparison year , 2020, when the GDP dropped 4.1%. But there are elements of concrete improvement in the economy, according to him, mainly in industry, civil construction, agribusiness and extractivism. For Silvio Campos Neto, the service sector is starting to show signs of recovery now. It was one of the segments most affected by the social isolation measures adopted in the covid-19 pandemic. “It is natural now that we have an advance in the vaccination process. We also hope that the service sector consolidates an improvement. Gradually, the improvement should reach a larger layer of the population. I think that’s the challenge actually: to make this economic recovery spread across different sectors and start to positively influence people’s lives, mainly through a more consistent improvement in the labor market, which is what should happen in the next months,” he said. Campos Neto says that, for the time being, there is no perception of an improvement in the economy, since the GDP in the 1st quarter, which registered growth of 1.2%, was driven by agribusiness and exports. “The perception society today is not in a positive scenario, not only because of the labor market, but also because of the inflationary context. Several prices of important items had high variations. But over the second half, we should see an improvement in the indicators”, he said. He expressed concern, however, with the scenario for 2022. He said that it is a “potentially complex year for economic decisions” because of the elections. In addition, the process of reducing stimuli in developed countries, such as the United States, should make it difficult for emerging nations to recover. “It is certainly a year with more challenges and, for this reason, the expectation of a more moderate growth next year (+2.2%),” he said.
PUBLIC ACCOUNTS
Silvio Campos Neto says he expects increased demands from the market for the return of fiscal rigidity. The measures adopted today do not ensure the stabilization of the public debt, he assesses. The expenditure increase ceiling for 2022 will be corrected with the inflation rate registered in the 12-month accumulated until June of this year. BC estimates it will be 8.4%. The high percentage allows for fiscal slack in the election year. But the market sees this gap with skepticism.Read other interview topics:fiscal adjustment measures – “From now on, it will be difficult to observe advances in relevant fiscal issues. We had a good Social Security reform, but the other measures left something to be desired. It is a reflection of a government with great difficulties in political articulation”;estimates GDP of +4.4% in 2022 – “There are signs of concrete improvement in some segments: industry, commerce, civil construction and every part of the agribusiness directed towards the exterior”;jobs – “O [trabalho] formal is already recovering and, possibly, the informal should also gain more impetus with the gradual overcoming of the pandemic”;water crisis and inflation – “We don’t expect rationing, but in terms of prices it is a risk factor. It may lead the Central Bank to have a more aggressive action on interest rates“;worries for 2022 – “It is a potentially complex year for economic decisions. And it will also have a more challenging external context with the prospect that the Fed [Federal Reserve] initiate a stimulus reduction process in the United States”;tax reform – “We don’t expect significant advances. Our tax situation is so problematic that the ideal would be to completely replace the system, along the lines of PEC 45, which was being discussed. But this is unlikely to happen“;administrative reform – “We can even observe advances, but diffuse and long-term”;dollar – “There would be room for an additional drop, but given the internal uncertainties and the rise in interest rates abroad, it could eventually be reversed in the 2nd semester”;inflation – “The perspective is one of deceleration. This 8% level does not seem reasonable until the end of this year and the next. We are talking about an economy that is recovering, but with idleness and the job market with a high unemployment rate“.
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