• Categories
  • Archives

Brazil Exceeds All Economic Expectations

Brazil’s macroeconomic situation is better today than what was forecast at the beginning of 2004, when the Central Bank (BC) and the market estimated a trade surplus of US$ 19.15 billion, foreign direct investments of US$ 12 billion, and a US$ 3.5 deficit in current foreign transactions. All of these variables surpassed expectations.

This year’s trade balance is ending the year with a surplus of over US$ 33 billion, foreign investments have already surpassed US$ 17 billion, and current accounts are registering a surplus of more than US$ 10.5 billion.


According to figures released December 28 by the director of Economic Policy of the BC, Afonso Bevilaqua, who presented the Quarterly Inflation Report, the indicators show “results better than what was expected.”


“There is a trend for a strong growth in productive activities, maintaining the considerable results in the trade balance and a favorable situation in the job market, the balance of foreign accounts, and growth in the Gross Domestic Product (GDP) and exports.” he says.


Growth in the GDP for five quarters in a row lead market analysts to estimate a 5.1% growth in the country’s generation of wealth this year. The forecast at the beginning of the year was 3.5%.


Alongside these figures, Bevilaqua pointed out the reduction in the ratio between net government debt and the GDP, which declined from 57.6% in 2003 to a little more than 52% this year, “which guarantees greater external sustainability,” fortified by the US$ 3 billion increase in net reserves and the US$ 8 billion in gross reserves, which will end the year at US$ 25.4 billion and US$ 52.4 billion, respectively.


The director of the BC referred, as a reason for concern, to the control of inflation, in consequence of current wholesale and retail prices. The rates, in his opí­nion, remain at levels that are “incompatible” with medium-term target trends, and this makes monetary policy tighter.


Adjusting to market forecasts, the BC revised its estimate of this year’s Broad Consumer Price Index (IPCA) from 7.2% in its September report to 7.4%,


As for the rest, the annualized interest rate of 17.75% and the exchange rate of R$ 2.75 per dollar remain the same, and the director of Economc Policy estimates an IPCA of 5.3% in 2005 and 4% in 2006. Higher than the government’s target of 4.5%, readjusted by the Central Bank in its September report to 5.1%.


In terms of the market, all of the forecasts for inflation exceed the government’s targets. Inflation should end this year at 7.47%, falling to 6.3% next year and 5% in 2006.


Translation: David Silberstein
Agência Nacional

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil: When Judges Go Beyond and Above the Law

The last days of the military regime (1964-1985) coincided with an incredible rise of ...

Economy Must Produce Well Being, Says Brazil’s Lula in Paris

President Luiz Inácio Lula da Silva declared that he would like to see the ...

Brazil Inaction Brings Malaria and Tuberculosis Back to Indian Population

The recent occupations of public buildings by Brazilian Indians are reactions to the ineffectiveness ...

Wider Use of Air Conditioning in Brazil Pushes Energy Consumption Up

Electricity consumption in Brazil totaled 28.6 gigawatt-hours in February, a 5.5% increase in comparison ...

Brazil’s Illusion of Wealth Forgets “Made in Brazil” Is Not the Same as “Created in Brazil”

The upsurge of the so-called “emerging countries” is a worldwide geopolitical phenomenon at the ...

Brazil to Buy US$ 5 Billion from UK in Patrol Vessels and Frigates to Protect Oil

Brazil, which has a defense market described as “one of the fastest growing in ...

In a Recession, Brazil Gets Stimulus Package Just in Time for the Elections

Finance Minister Guido Mantega presented on Monday a package of tax measures aimed at ...

Brazil’s Right to Information Bill Still Far from International Standard

An amended version of the Brazilian draft Bill on Access to Information has been ...

US State Secretary Tries to Appease Brazil While Street Protests Lose Steam

<The government of Brazilian President Dilma Rousseff will raise the issue of US spying ...

Brazilians, the World’s Friendliest People. Or Are They?

It’s widely known that Brazilians are the largest community in Orkut, Google’s invitation-only social ...