 Good afternoon, ladies and gentlemen in the room and online at this press conference at the 48th annual meeting of the World Economic Forum We are delighted and honored to have Mr. Enrique Mereles Brazil's Minister of Finance Earlier today President Timmer struck an upbeat note and stated that Brazil is back in business We look forward to hearing your perspective minister Well, thank you It's a pleasure to be here At the forum. It's a very positive moment for Brazil We came here last year when we met Participants investors and authorities in general Looking favorably at the perspective of the change and the improvement in the Brazilian economy We were still coming out of the deepest recession in brazilian history Which took place in? 2015 2016 fortunately the evolution of the reforms which are being conducted and approved and implemented in brazil Is going very well And as a result of that the economy has already recovered brazil last year Was able to grow at an rate compared to the Previous year of about one one point one percent and Created About 1.4 Million new jobs The the People are encouraged by the Developments in the economy and their recovery and so on so forth Then they are also joining the job market looking for jobs and then unemployment itself Falls a little bit less because of the new interest. It's good news And we are expecting to have More than 2.5 million new jobs created in the year 2018 Our expectation for GDP growth rate in 2018 is About three percent Which is above what is still being projected By many analysts who are getting closer to that number. There is an evolution throughout the year The number at some point Was that had reached 2.5 came down at two percent the projection for 2018 market now is getting Closer to three percent moving steadily towards that number In summary, uh, the brazilian economy is performing well The result of this is the result of a series of reforms which are approved in brazil the first one was kept In the growth of government spending, which is going to create Crowdy in of the private sector in the economy for investment consumption The government in 10 years time Would come from 20 percent of the total gdp federal government to about 15 percent That's a very powerful incentive for investment consumption and growth in the economy For investment is increasing as domestic one. There is A healthy increase in the rate of investment in the country will have the numbers for the third quarter When there was a growth of eight percent investment in machinery and equipment In in in brazil in summary The the economy not only is recovering But there is also a series of steps which are being taken in order to increase the trend for the future For instance, there was the approval of labor reform Which modernized the job market and the the whole system in a way that that would improve productivity and increase In due time the creation of jobs the economy would be more flexible and as a result We expect to have even higher growth in the future. There are other reforms as well like Some important change in the credit market Which it would also help And that would provide a better allocation of Investment into the more productive areas and companies of the economy and and that is is also very important and There is At the same time A strong effort regarding the cut in red tape throughout the country to give an idea in the city of san paolo We're decreasing the number of days Which it took to open or close a company in the city From 120 days to about seven and then five And eventually three in summary, there is a series of reforms which aim at the end of the day to have Moment when in the next years will have the trend rate in brazil, which The more graphically adjusted Was that 2% Going up and we expect it After all these reforms to be at around between anything between 3.5 and 4% the trend rate Of the GDP growth for next years There is a very important reform being voted in brazil now. It is the pension reform When we are reforming the social security system We expect it to be voted now in february next month And also this would be a very important step forward towards balancing Not only balancing the budget in the future, but also creating Farer system In which The lower level income persons who would have The same rights and the same conditions as higher salaries Which the social security system today is somewhat By us towards a higher salary forward of reason that is being corrected with the new Social security system, which is being again proposed to congress Besides modernizing the system and adjusting for the demographic changes in brazil throughout the next Last years in summary, there is a whole range of reforms being implemented in brazil and That is already Showing its results of business confidence is up consumer confidence is up the economy is growing now There is yet a solid pace and we expect it again to be Keeping this pace during the next couple of years and then eventually Increasing somewhat that rate as a result of the productivity reforms. That's about The summary of what I would like to say Wonderful I would like now to open the floor in case there's any questions from the audience Lady in front Please state your name and your organization I've heard from you and other brazilian authorities that there is a interest a big interest in brazil this year especially this year And there is also optimism, but what you can see earlier was the during the Mr president speech the room was not So full How can you explain that for me? There is an interest really No, I think that It's it's normal. I think that the the the speech of the president was very well received The feedback I got from several members of The audience and the ones who saw From a distance By the transmission And they basically Is stated and I got that from several different sources investors Entrepreneurs businessmen Authorities that the speech of the president was very well received in the sense that It provided a very clear direction of to where the country is going and how That is evolving in brazil and the brazilian commitment to keep this direction For the future again With all the the electronic transmission Systems and and channels up today. It's normal that not every room Is full because people can watch and see and listen from a distance Hello minister. This is Vivian Rodriguez with Bloomberg I wanted to bring the discussion to a very specific point and this point is The question of the transfer of rights on petrobras and the federal government Earlier today we spoke with minister coelho here who said that he's Close to coming to some sort of common ground between the company and the government But I wondering which camp do you follow if you the minister diego de vera says that we need money And we were going petrobras needs to pay us Where is petrobras is saying we need to get the oil ourselves? So Where does the finance ministry stands into this dispute right now? well, uh, there is a negotiation going on What we have is is a positive development in the sense that more oil was found in discovery And there is a discussion evidently now Uh between the treasury and the petrobras Of how to settle that because the way That agreement was Defined in the past was not precise But we are having a very good Group series of conversations with the president of petrobras Actually, we had a meeting even last week in brazilia And I am sure that in due time We will reach a good agreement evidently that treasury indeed Is expecting to receive a good Compensation from petrobras for all the new oil fields and all of that but again I think that the question is to be Here on a fair ground And if I can just follow up also because bringing back minister diego de vera who mentioned that there could be What we say in portuguese contingency a mentor right a contingency coming very soon I mean of how much that would be I mean in how when could we expect that? Well, we don't have that number. Uh the contingency a mentor means the fact that If for some reason The expenses are higher than what is in the budget what is uh expected or set by the ceiling on Growth of government spending for instance The government can basically cut either horizontally or selectively The budget area by area and and basically what We are saying is that if there is a need That will be done We have not determined at this point any specific amount there are some Important points which are under decision now for instance. There is a decision on the supreme court about the postponement or not of The increase in salaries of civil servants for instance There is other there are other decisions Which are going to be taken by congress when it's again Resume now the the legislative work by february Like the taxation On the payroll for instance of corporations and etc that after some time It the taxation works In that specific case not only to increase the revenues, but only also to decrease expenses by treasury Because treasury reimburses the social security system for part of that loss every revenue in case There is no such a payroll tax in summary Uh, there are several projects going on what the minister is basically say is We are prepared if it's necessary. We will have That adjustment in the budget which actually it did take place in the year 2017 There was the so-called contingency a mental in the years 2017 and if necessary that would be done again German had a question in the front uh You had some meetings with businessmen Could you just elaborate a little bit summarize if there is any new investment announced for brazil after the during this meetings Well, the projected total for a direct investment for brazil in the year 2018 Is projected by finance ministry at 88 billion dollars in the year 2018 The Forecast for what took place in 2017 Is about 75 billion It's a forecast because the final number was not still published by the central bank In summary, this is what we are expecting and all the conversations we are having with investors and business which have already Work in brazil are Confirm that it's it that there is a growing confidence that the brazilian economy is Growing and we'll keep growing during the next years according to our projections in summary It's a confirmation basically of the numbers. We Are projecting for the year 2018 it's again GDP growth rate projected at 3% versus 1% last year and versus a contraction In 2015 and 16 of about 8% of GDP Then it's a strong recovery And and companies are already Betting on that I'd like to see if there's one more question from the room I wish you could talk a little bit about electro brass I mean The minister today. I'm just basically chatting having two ministers to chat through me here today. So the Minister of energy said that he wants to go through with the sale of electro brass the sale of shares the primary offer Very soon this semester first and that the government's objective is to try to raise to 12 billion rise That was the estimate. Do you think this is manageable? I mean giving all that's going on just to to get the regulation plus the pension reform Plus the elections Right, can we actually see this taking place until june? Yeah, I think that it's it's it's it's viable. Yes The pension reform we expect it as I said to be voted now in february And after that we have still Several months of Have a work by congress before We get to a full electoral campaign after the holiday in july in summary still I think that there is Plenty of time for that to be voted and discussed. It's a very important project It's I think as important for brazil as It was the privatization of the telecommunication system in the 90s I mean private capital will be Investing in brazil. It's a very important sector now with demand growing. We expect really To to see investments coming In into those projects not only necessarily hydroelectric but in in several other Sectors in summary We are working hard toward that direction And it's a good project. It's a solid one The the company will basically Uh be capitalized with new capital increasing The amount of resources the company has for investment, etc And that would also come with a change in the management and governance structure of the company becoming Company which is independently managed, etc And I think that that would be Market friendlier and We think it would attract much more investment for the country for the electricity sector and A better management of the brazilian resources On that ambitious note, I would like to first thank the audience In the room and online for joining us for this press conference and of course, minister mereles. Thank you very much Thank you. It's a pleasure to be here