Brazil’s Economy Could Recover Quickly After Political Uncertainties Clear, Central Bank Chief Volpon Says

Brazil’s economy could recover surprisingly quickly after political uncertainties dissipate, central bank director Tony Volpon said Monday.

“A reduction in uncertainty, which in the case of Brazil is essentially non-economic in nature, could have a surprisingly rapid, positive impact on economic growth,” Volpon said at an event in Kyoto, Japan, according to prepared remarks published by the central bank’s website.

Volpon is one of two dissenting directors who have voted in recent months for an increase in benchmark interest rates. Key rates have remained unchanged at 14.25 percent since July 2015.

The sharp economic contraction has brought about much-needed adjustments to the Brazilian economy, Volpon said.

“Much did happen which can serve as the basis of economic recovery if the right policy choices are made,” he told investors at the event.

“I believe the root cause of the current recession is the impact of uncertainty on aggregate demand,” he said.

Massive street protests have swept across Brazil in recent days, supporting or rejecting demands for the impeachment of President Dilma Rousseff.