Brazilian economic growth this year is guaranteed and will be over 4%, said minister of Planning, Budget and Management, Guido Mantega, speaking at a forum on XX century Brazilian social problems.
The minister said he was forecasting industrial sector growth of 5% or 6%, with installed capacity use up while production costs were down.
That, he said, would mean more productivity which will translate into bigger profit margins for businesses. All of which led the Minister to say that he saw no reason for price increases.
“Businesses are in a comfortable position. There is no reason for them to raise prices,” declared Mantega, adding that inflation is under control and the country will continue to grow even if interest rates rise.
The Minister also said that the government intends to continue supporting the export sector through incentives. He said there was no supply problem and that both foreign and domestic demand can be taken care of.
Inflation during the period between July 14 and August 13, gauged by the Getúlio Vargas Foundation’s (FGV) Consumer Price Index (IPC-S), was 0.80%, 0.04% higher than for the previous period.
According to the FGV’s Brazilian Economics Institute (IBRE), the Food and Housing groups exerted the biggest impact on the index. Together, the two groups accounted for 78% of the composition of the IPC-S during the period.
The food group rose from 0.74% to 1.06%, led by vegetables and legumes (7.39%), sweeteners (5.83%), and fish (0.74%), among other items that experienced price increases.
Their aggregrate weight in family food expenditures in the 12 capitals covered by the survey was 57%.
The FGV economists explained that the Housing group, even though it showed deceleration, declining from 1.25% to 1.02%, exerted the biggest single influence on the IPC-S, on the order of 0.32%.
Among the 12 capitals surveyed, inflation accelerated in 7. The highest rate was registered in Recife (1.38%), and the lowest, in Fortaleza (0.19%).