Brazil’s Growth Recipe: Exports Up and Inflation Down

Brazil’s Institute of Applied Economic Policy (Ipea) released its Conjunctural Bulletin #68, with revised forecasts for growth in this year’s GDP (Gross Domestic Product).

According to the economist Paulo Levy, Ipea’s director of Macro-Economic Studies, the increase should come to 3.5%, down from the 3.8% predicted in the previous forecast.

With regard to this year’s export volume, on the other hand, the Ipea doubled its growth forecast from 5.1% to 10.2%, in consequence of the dynamism demonstrated by shipments of products abroad.

The institute’s growth forecast for imports was also revised upwards, from 13.8% to 18.9%. The projected trade surplus for this year was raised US$ 3 billion, from US$ 24.7 billion to US$ 27.7 billion, Levy said.

Levy pointed out that the projected trade surplus is lower than the US$ 33.6 billion achieved in 2004.

Monetary Policy

Meanwhile, Minister of Finance, Antônio Palocci, assured that Brazil’s monetary policy is on the right track. He reiterated that the country’s monetary policy is pursuing levels of inflation that will ensure long-term growth and that the government will not abandon this goal.

“Nothing is worse for growth than rising inflation, because, in the first place, it consumes family income, and, in second place, it disorganizes the economy,” he observed.

Palocci affirmed that the quest to keep inflation down preserves family income and guarantees consumption. He pointed out that industry achieved record growth in 2004 and that workers’ incomes also rose.

The Minister contended that these two factors, together with an adequate system of credit, help enable families to consume.

In Palocci’s view, the country is experiencing a moment of favorable investments, and periods of slower economic activity are normal, since linear growth is non-existent.

Translation: David Silberstein
Agência Brasil



You May Also Like

Brazil Market Follows US in the Red

Brazilian and Latin America slumped on the day, following U.S. markets into the red. ...

Huge Shadow of Lula Is Just One of Many Challenges for Brazil’s New President

Dilma Rousseff became on Sunday Brazil’s first woman president and the first former guerrilla ...

A Study Trip to Brazil Shows an Unexplored Side of Bahia

Bahia Street, a nonprofit organization based in Salvador, Seattle, and London, will be hosting ...

Good Political and Economic News in Brazil Helps Drag Market Up

Latin American markets were mixed, with Brazilian stocks edging up amid conflicting signals on ...

Well, I’ll Be Damned! The Drummer Was Right After All!

Never print anything in haste, or in anger, I always say. Well, maybe the ...

Brazil Wants Better Integration with the 10 Countries It Borders

A greater integration between Brazil and South America is one of the focuses of ...

The Big Media Abhors Criticism

In the '90s, "giftomania" led the biggest Brazilian newspapers to the pinnacles of circulation ...

Safe Sex in Brazil: 25 Million Free Condoms on Carnaval, 1.5 Billion in 2006

The Brazilian Ministry of Health’s National Program for Sexually Transmitted Diseases (DST/AIDS), is ready ...

Europe, India and LatAm in Gramado, Brazil, for Tourism Deals

The 18th edition of the Gramado Tourism Festival, in the city of Gramado, in ...

US Is Buying Less from Brazil

Although the US remains Brazil’s biggest trade partner, it is buying fewer Brazilian goods. ...