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Brazil eyes $100 billion annual exports to China within a decade - Guedes

By Jamie McGeever
·2-min read
FILE PHOTO: FILE PHOTO: Brazil's Economy Minister Paulo Guedes delivers a statement at the Itamaraty Palace in Brasilia

By Jamie McGeever

BRASILIA (Reuters) - Economy Minister Paulo Guedes on Monday lauded the economic boost from Brazil's policy mix of low interest rates and a weak exchange rate, forecasting that exports to China will reach $100 billion a year within a decade.

In two online live events, Guedes also reiterated his view that the economy is undergoing a "V-shaped" recovery and creating jobs, and said the government's economic reform program will accelerate once this month's local elections are done.

"In the next two years we will privatize, open the economy, simplify and reform the tax system, and reindustrialize the economy," Guedes said in an online address to the International Chamber of Commerce Brasil.

"In the next 10 years our forecasts are for $100 billion of exports to China per year," he said, adding that a reduction in import taxes will ideally be part of wider tax reform.

Brazil's exports to China have exceeded $60 billion in each of the last two years and are on course to repeat that this year.

Guedes also said he would like trade with India to reach $100 billion a year, which would mark a huge jump from last year's $7 billion.

Guedes said opening up Brazil's goods transportation market is on the government's agenda, and is also one of the conditions from the Organisation for Economic Cooperation and Development rich club of nations for Brazil's entry.

In an address to the Rio de Janeiro Federation of Industries, Guedes said record low interest rates, currently 2%, are supporting exports and fueling a construction boom.

He also said that jobs lost in this year's recession could be a fifth of those lost in the 2015 and 2016 recessions.

"Against facts, the false narratives dissolve," Guedes said, citing pessimistic forecasts at the start of the pandemic of an economic decline this year of up to 10%. The latest average private sector forecasts are for a fall of around 4.5%.

(Reporting by Jamie McGeever and Marcela Ayres; Editing by Chizu Nomiyama and Angus MacSwan)