What is your assessment of global economic growth this year?
We believe that global growth this year will be lower than in 2021, but we are a little more optimistic than average for several reasons. The most important are the end of supply restrictions and stimulus measures in the most important economies.
As well?
Starting with the end of supply restrictions. We expect a gradual reopening of activities and a change in the consumption profile. During the pandemic, consumption
focused a lot on goods. Now, there should be more weight in the services sector.
What about stimulus measures?
The central bank of the United States will end the injection of resources and signaled an increase in interest rates. Monetary policy should no longer be expansionary, but
he will not become a contractionist. And the US government has a long-term investment proposal. In the case of China, public spending should stimulate the economy.
Are there other variables to consider?
Yes. The savings accumulated in the United States during the pandemic make it possible to foresee an increase in demand, even with the reduction of fiscal expenses. And the European Central Bank (ECB) is more comfortable with inflation than the Federal Reserve, which should postpone adjustments in Europe to 2023.
How are emerging countries?
Emerging countries, Latin America in particular, have been having problems with unanchoring inflation expectations. Brazil is a good example. The Central Bank had to raise interest rates throughout 2021 and should continue to do so in 2022 to make inflation converge to the target. We should see similar processes in Chile, Colombia and Mexico.
Does this influence the attraction of foreign investments?
Overall, investing in emerging countries will be more challenging, especially for those using the US interest rate as a benchmark. But it is necessary to realize
the nuances. Here in Brazil we are not immune to US monetary policy, but the Selic rate is returning to double digits, which reduces the impact. And still
there are investors with an appetite for infrastructure projects such as roads and sanitation.
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