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Brazil See Signs of a Recovering Economy

Brazilian worker shows working notebook The number of the first quarter are already giving signs of improvement in the economic scenery in Brazil, something quite different from what the country lived in the last quarter of last year. According to the president of the Institute of Applied Economic Research (Ipea), Márcio Pochmann, a series of events that took place late last year have not been repeated this quarter.

"The end of 2008 combined the effects of the crisis with the results of decisions taken previously, like higher interest rates, still in the first half of 2008, and the need for companies to reduce stocks and dismiss people," pointed out Pochmann, who participated, last Friday May 8, in Curitiba, in a debate about the challenges of Brazil in the face of the global crisis.

According to him, the financial crisis affected the regions of the country in a heterogeneous way. The states of the South and the Southeast were the first to feel the crisis, with lower industrial production and employment, in late 2008.

The North and Northeast, according to Pochmann, presented in the first quarter of this year a worsening of the labour market and it became harder to get a job. According to him, this difficulty has been taking place in the small cities that are not included in national researches.

He returned to estimating that Brazil should not have a recession this year. The Ipea expectation is that the country may have Gross Domestic Product growth of between 1.5% and 2.5%, with greater growth rates in the second quarter. What is concerning, according to him, is that despite the growth, there may not be greater offer of labor.

"Over the last five years, we have built a trajectory of economic expansion, market improvement, reduction of poverty, reduction of income inequality. The doubt now is whether, despite the economic growth, we will be able to maintain this cycle."

Pochmann mentioned measures adopted by the government, like the reduction of interest and taxes, expansion of credit, the increase of the minimum wage and income transfer programs. To him, these are decisive measures for the positive reaction of recent months not to be interrupted.

ABr

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