CG/LA Infrastructure's InfraBlog
16/04/2013 – 08H54
Brazil can use monetary policy – raising interest rates – to contain rising inflation, but the country’s priority should be to untie the knots that hold back production and export, the IMF chief Christine Lagarde, told Folha.
“Despite being low, growth progressed, and we anticipate that 2013 will be better – although we are revising it down a bit. We also think that Brazil has used fiscal and monetary tools effectively. Concern over inflation can be treated sensibly, perhaps with monetary policy [interest], which should already be in consideration.
The point is that there is much to be done about the bottlenecks in ports, airports, highways … the supply and flow of goods is limited by bottlenecks in almost the entire country. Improving infrastructure could greatly improve the country’s situation, and that’s what we suggest be prioritized. The predictability of the business environment is also important.
I love sports, and you will have the World Cup and the Olympics – it is the perfect justification to improve infrastructure and transportation,” she said.
The “currency war”, the country’s constant position at the International Monetary Fund, is a fear that dissipates – and never came to war, an expression that she attributes to the excess “passion” of Guido Mantega [Minister of Finance] to speak.
“Everybody always pays a lot of attention to what my colleague, Minister Mantega says, and sometimes he speaks with such passion that he uses strong words. What he calls the “currency war” I call forex concern, and I understand that it exists. I also saw that he said he was not concerned about the flow of [external] capital, a sign that the Brazilian market is absorbing this capital, and control tools are being used. But I see the discourse of war is already dissipating. And concerns have to be addressed by everyone,” she said.
The first woman to head the Fund, Lagarde spoke to the Brazilian newspaper and the Mexican “El Universal” yesterday, the eve of the ministerial meeting of the IMF, to talk of crisis, slow growth and the weight of the organization she heads, in reform.