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Brazil’s Meirelles says Trump could hurt growth, capital flows: blog
2:41 CAT | 11 Nov 2016
Reuters / Brazil's Finance Minister Henrique Meirelles attends an economics and politics forum in Sao Paulo, Brazil, September 30, 2016.
Donald Trump’s administration may raise funding costs for emerging countries and hurt economic growth if the U.S. president-elect’s policies match his campaign rhetoric, Brazilian Finance Minister Henrique Meirelles told a local blog on Thursday.
Meirelles said it was too early to say whether Trump will step up protectionism as many investors fear, following his promises to raise trade tariffs and erect a wall along the U.S.-Mexican border, according to Blog do Fernando Rodrigues, a political news blog ran by Brazil’s largest web portal, UOL.
The minister said the best way for Brazil to weather any market turmoil was by implementing budget reforms, which would reduce the nation’s dependence on foreign capital.
“If (Trump’s election) leads to more risk aversion, it could certainly increase costs and limit access to capital,” Meirelles was quoted as saying. “Assuming that hypothesis, there could be a reversion in growth rates of many countries, including Brazil.”
However, Meirelles questioned whether Trump’s statements were “just campaign rhetoric” or “a policy to be implemented.”
Brazil’s currency, the real, lost 4 percent on Thursday to its weakest level in nearly two months, at 3.33 per U.S. dollar. Brazilian stocks fell 0.55 percent.
Finance Ministry officials did not immediately respond to a request for comment.
Several Brazilian authorities, including President Michel Temer, on Wednesday congratulated Trump on his victory but called on him not to resort to protectionism. The South American nation is striving to boost trade to overcome a severe recession.
Source: Reuters
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