Guedes Says World Is Entering Stagflation Period, Brazil Is Heading in Opposite Direction

BRASILIA (Reuters) – Brazil’s Economic system Minister Paulo Guedes explained on Monday that the international economy is getting into a stagflation time period, which will be “considerably more critical” than he beforehand imagined.

Brazil, on the other hand, is heading in the opposite course, posting financial progress with slipping inflation and reduced unemployment, he reported at the inauguration ceremony of the new head of the country’s market regulator CVM.

“We are going to see the financial universe in contraction, but Brazil is in the other path,” he claimed, stressing that the region has its personal growth dynamics.

The ministry revised its GDP progress outlook this year to 2%, from 1.5% earlier, on the back of stronger financial indicators because May possibly, an enhancement in the job sector and an enhance in personal investments.

According to Guedes, the nation must benefit from reconfiguring international manufacturing chains immediately after the war in Ukraine, and far more investments will arrive to the nation though buyers look for for a safe and sound haven.

The minister also reported the govt is performing to “soon” approve a tax exemption on mounted income investments.

The minister instructed Reuters that the measure entails an revenue tax exemption for foreigners investing in domestic corporate bonds, which was initially reported by Reuters in February.

Foreigners currently pay a 15% tax on money gains from local private-sector bonds, but are exempt from the tax when they commit in Brazil’s inventory current market and public debt. Brazilians shell out a 15% to 22.5% cash flow tax charge on returns from company bonds, depending on how very long they are held.

The govt supported inserting the measure into a invoice that modernizes laws for credit history collaterals, which even now needs Senate approval.

(Reporting by Marcela Ayres enhancing by Jonathan Oatis)

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