Brazil does not need to fear recession abroad, strong dollar, says Guedes

(Reuters) – Brazilian Economy Minister Paulo Guedes said on Monday that the country need not to fear recession abroad or a stronger dollar, arguing that Latin America’s largest economy has its own growth dynamics.

Speaking to businesspeople at an event in the state of Bahia, he stressed that the country has continental dimensions, is in good fiscal shape and heading towards what may be a 3% expansion this year.

Meanwhile, developed economies will face stagflation, in addition to the impacts of the Ukraine war, he said.

“They say, well, if there is a recession there (abroad), the price of agricultural products will fall, it will be terrible, Brazil will end. Nothing will end,” said the minister.

“(With) the dollar a little stronger, as it is now, people engage in domestic tourism, the competitiveness of our industry increases, the competitiveness of our agriculture improves.”

The U.S. dollar reached 5.40 reais earlier this session, at the highest levels in two months, amid global fears about aggressive monetary tightening and the risk of recession in developed economies.

During his speech, Guedes told the audience not to be scared by the “wind outside.”

“The dollar goes up, the dollar goes down to adjust, but the economy, the dynamics of Brazilian growth is from domestic savings, innovation, technology,” he said.

(Reporting by Marcela Ayres; Editing by Toby Chopra)