Speaking in an interview at the Rio de Janeiro Industrial Federation (Firjan),in Brazil, Brazilian Minister of Finance, Antonio Palocci, declared that based on real income and retail sales data, if the country can maintain economic stability and the flexible monetary policy already installed by the Central Bank, "there is a clear tendency for Brazil to continue on a long growth cycle."
Palocci pointed out that for over two decades the country’s social and economic inequalities were substantially unchanged. "What we now see, not only in our government, is an effort over a period of years that has resulted in a reduction in the difference between the income of Brazil’s richest and poorest. The poverty level has improved, so has the Gini curve," said the Minister.
He went on to say that 2.5 million people have risen above the poverty line, a result of "the work that Brazil is doing."
Palocci admitted that the fight against inflation has been costly, recalling that in 2003 "with an economic crisis the interest rate rose to 25% per year."
He concluded by saying that the Central Bank had to deal with an inflation spike at the end of last year that pushed it up to 8%, but that this year it will be around 5% because of strong monetary policy. "Sometimes it is necessary to pay the price of a rigid monetary policy so we can ensure long-term growth," said Palocci.
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