Brazil: Central Bank Rejects Spending, Poverty Rises Speedily

According to the latest forecast by the Central Bank, Brazil's economy will contract by 5.2 percent as the inflation will rise to 2.12 percent.

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On Monday, the Central Bank's president Roberto Campos said that the country's high spending levels were compromising its credibility. "We are at an inflection point right now that if we spend more money, the cost in credibility coming from the fiscal side is far bigger than the benefit of the spending itself,” Campos remarked.

However, the Economic Commission for Latin America and the Caribbean has said that governments in the region will have to maintain or increase the fiscal expending or stimulus policies to overcome the crisis unleashed by the COVID-19 pandemic.

“If you want to induce growth, it is better to spend less than to spend more because we are getting penalized by markets,” the Central bank president said during an online event. However, the latest figures in Brazil show that an increment in public spending is urgent.

According to the latest report by the Brazilian Institute of Geography and Statistics (IBGE), as of the four weeks of September, unemployed people reached 14 million Brazilians.