Elaine Patricia Cruz           Reporter Agência Brasil

São Paulo – Minister of Finance, Guido Mantega, says that Brazil is ready and able to respond to any economical crisis with monetary and fiscal tools. Speaking at a conference of the Order of Economists, Mantega said Brasilia is prepared for the crisis.

“To deal with the international crisis, we should continue our fiscal consolidation. Sound, solid fiscal policies are fundamental at this moment. What the government is doing is raising the bar, seeking a higher level for the primary surplus,” declared the minister “so we continue producing strong results.”

The minister went on: “We will reduce the cost of government, make better investments and open the path to lower interest rates in the future. Our monetary policy will be more active, our fiscal policy more defensive.”

Mantega said the situation in advanced countries is a continuation of the 2008 financial crisis. The problems in the United States and Europe exert pressure on the world economy and could exacerbate exchange rate problems as everybody looks for new markets.

“All this occurs against a backdrop of low growth and shrinking markets for manufactured goods. There is a fierce dispute for the few markets that exist. Brazil is one of those markets. We face predatory competition,” said the minister. “Countries manipulate exchange rates in order to be more competitive. We can see that the American economy has not had the expected recovery after the 2008 crisis. Progress has been very slow, so slow there is a threat of a new recession. In Europe, things are not any better. The US is probably even worse off, with a huge debt crisis as well.”

According to Mantega, the forecast for the advanced countries is two more years of very slow growth. “Emerging countries are better off, but not out of danger. Brazil has strong reserves, a thriving domestic market and is not as dependent on foreign trade as other countries, such as China.”

Allen Bennett – translator/editor The News in English

Link - Mantega: Brasil tem "bala na agulha" para responder a eventual crise