In 2010, after stagnation last year, Brazil’s Gross Domestic Product (GDP) should grow 5.2%. The figure was presented by Finance minister Guido Mantega at a meeting at Granja do Torto, the second presidential home in Brazilian capital Brasília, last week.
The Finance Ministry’s estimate is lower than that of the Central Bank. In its inflation report, disclosed in late December, the institution forecasted growth of 5.8% in the economy this year.
The economic growth, according to the Finance Ministry, should be sustained mainly by domestic demand, with forecasted growth of 7.3%. This expansion, however, should be counterbalanced by lower foreign trade.
According to the minister, imports, fund transfers abroad and expenses of Brazilians in other countries should have a 2.1% negative impact in growth of the GDP, resulting in a rate of 5.2%.
Last week, the Central Bank disclosed that the balance of Brazilian foreign accounts in December was US$ 5.94 billion negative, the worst result for the month since 1947. According to Central Bank forecasts, Brazil should have a foreign currency deficit of 2.095% of GDP in 2010.
According to the minister, the investment should rise 16.1% in the period, after having dropped around 10% in 2009. Family consumption should grow 6.1% and industrial production, which dropped 5.3% last year, should grow 7.1%.
To the Finance Ministry, the elevation of investment next year shows that the economic growth is sustainable in the medium and long-term. “The growth is sustainable as it is based on sure footing and maintenance of inflation under control, fiscal responsibility and low foreign vulnerability,” according to the ministry’s document.
The 2009 GDP result will only be known in March. The Finance Ministry’s forecast is for growth of 0.1%. The Central Bank, in turn, has forecasted 0.2% expansion.