It turned one year ago, but without any celebrations or remembrance, one of the most famous among the many amazing and delirious statements by the Minister of Economy, Paulo Guedes, passed.
It was on March 12, 2021 that Guedes said, in a virtual event on the Jota news site, that when he went to the supermarket, people thanked him. “Sometimes they say: we pray for you, we are feeling what you are doing for us”, added Guedes.
The statement sounded astonishing not only because prices were, at that very moment, beginning to climb higher. It was also surprising because no one had ever seen Guedes in a supermarket, at least since the economist took office.
Dropping delusional phrases is typical of Guedes. “Brazil will surprise the world”, “We are going to make a liberal revolution”, “We are going to privatize 1 trillion”, “With R$ 3 billion, R$ 4 billion or R$ 5 billion we will annihilate the virus” — these are some of the many and many surprising statements by the minister. All of his announced big plans are for “next week.”
At that moment, at the end of the first quarter of 2021, Guedes was under pressure to increase spending in the fight against the second wave of covid-19. He had managed to approve the PEC Emergencial, which made room outside the fiscal control rule of the spending ceiling to return with emergency aid. The BRL 600 monthly aid, later reduced to BRL 350, had ended at the end of 2020, and Guedes resisted accepting a new income transfer program for vulnerable people above BRL 250 monthly on average.
The speech, unexpected and clueless, of thanks to Guedes when they saw him in the supermarket, was delivered in a context of tension in the government. At the same event, before announcing that people at the supermarket said they were praying for him, Guedes denied being on “prior notice” or thinking about leaving the government.
He had Guedes’ fingerprints from the delay in the return of the aid. His then Secretary of Economic Policy, Adolfo Sachsida, now Minister of Mines and Energy, had released, at the end of 2020, an unrealistic diagnosis of the evolution of Covid-19. According to the opinion of the Ministry of Economy, released by Sachsida in November, the chances of a new wave of covid-19 in Brazil were “very low”. The conclusion, which turned out to be tragically wrong, was based on an unsupported assessment, based on the hypothesis that an alleged herd immunity was already being achieved in the country.
At the moment when Guedes announced that people were thanking him for his work in the government, the second wave of covid-19 exploded in Brazil. At the same time, Bolsonaro was clamoring against vaccines and delaying the vaccination process. In June, the number of deaths from covid-19 in Brazil reached 500,000. In all, to date, there have been 30 million infected and more than 660,000 deaths.
Inflation was also, at that time, at the end of the first quarter of 2021, starting to show that it was going to explode. In March, the IPCA (Ample Consumer Price Index), accumulated in 12 months, reached 6%, but in May it reached 8%, surpassing 10% in September.
Since then, month after month, it has remained in double digits, in the 12-month period, having surpassed 12% in April. The IPCA-15 for May, released this Tuesday (24), still shows upward pressure. It retreated well from April, but still rose 0.59% on the month, the biggest rise for the month since 2016, advancing to 12.2%. Food prices, the ones that scare people at the supermarket, continued to push the monthly high.
Another escalation, that of the basic interest rate (Selic rate), in reaction to the rise in inflation, also began in the same period. In March 2021, the Selic made its first jump after parking since August 2020 at 2% per year, the lowest level since the adoption of the inflation targeting system in more than 20 years. It rose to 2.75% and has not stopped climbing, reaching, in May 2022, 12.75%.
A year later, if Guedes went to a supermarket today, he might think, as the internet anecdote says, that he was in a church or temple. Inside, looking at the prices in the clouds of the products on display, you can only hear people exclaiming “Oh my!”, “God forbid!”, “Oh, my God!”.