• Categories
  • Archives

US$ 32 Billion Surplus Makes Brazil Comfortable

The export growth has made Brazil stronger with regard to foreign crises. The US$ 25 billion trade balance surplus, obtained from January to September this year, should guarantee the sustainability of the Brazilian economy in case of possible international shock.

“A foreign crisis, possibly caused by oil, may affect the Brazilian economy growth level. However, Brazil is currently solider so as to face possible foreign turbulence, due to the improvement of the trade balance,” stated Roberto Padovani, partner and director at Tendências consultancy.


The government is to end 2004 with a US$ 32 billion surplus in foreign sales. “Having a dollar offer of this magnitude provides comfort as to the country capacity of honouring its foreign debt,” stated Rogério Mori, economy professor at Getúlio Vargas Foundation (FGV) in São Paulo, in southeastern Brazil.


The export performance has placed the country in one of its best economic moments since president Luiz Inácio Lula da Silva was sworn in, in January last year. Foreign trade revenues may rise as high as US$ 90 billion by the end of the year, US$ 23 billion more than in 2003.


Adding to this, the improvement of income in the country and the greater job offer are also accelerating the level of internal consumption, guaranteeing greater domestic demand for the companies.


Industrial sales have grown 20% in August when compared to the same month in 2003, according to figures supplied by the National Confederation of Industries (CNI).


The forecasts show that the country has conditions to continue growing next year. This is so true that Brazilian companies are starting to invest to increase their productive capacity.


“There is a new investment cycle starting in the country,” stated the coordinator of the CNI Economic Policy unit, Flávio Castelo Branco.


Various companies are adopting longer work shifts so as to supply the rising demand.


“This is a way to guarantee production in the short term and shows that companies are going to start investing and hiring,” stated Castelo Branco.


Export sectors, like the steel sector, for example, are currently operating at almost full installed capacity.


Sectors that are directly connected to credit, like cars, electronic products, and household appliances, are operating at high levels.


“The interest drop was the element that generated greater dynamism in credit, benefiting the sector of durable goods,” declared Rogério Mori.


Such products are normally purchased by Brazilians through loans. The country benchmark interest rate dropped from 26.5% in July 2003 to 16% in April.


Now it has been increased slightly, to 16.25%, but it is still far from the previous level.


Investment


The rates of investment in the country, in the first six months of this year, are already showing an improvement.


They reached 18.9% of the Gross Domestic Product (GDP), the largest percentage in the fist half since 2001, when it reached 20.2%.


According to the FGV professor, however, for the Brazilian economy to maintain the current GDP growth between 4% and 5% a year, as forecasted in 2004, the investment must be even greater, between 22% and 23% of the GDP.


“The country needs to establish a growth agenda so at to make it possible to exceed the 4% growth barrier and remain at this level for many years,” stated Mori.


There should not, however, be restrictions to industrial goods offer in the short term, according to the Economic Policy coordinator at the CNI. The current rate of use of the industrial installed capacity is at 83.9%.


Next year, export should continue rising, but at a slightly lower level. The forecasts point at foreign sales of US$ 94 billion, US$ 4 billion more than this year.


“The export sector is going to continue with strong demand, but it will grow at lower levels, as will the sector of durable goods,” stated Mori.


The economist stated that the latest increase in the benchmark interest rate and devaluation of the dollar, which is currently at the rate of approximately R$ 2.80 (reais, the Brazilian currency) to US$ 1.00, should slow investment and export growth a little.


Greater Employment


Internally, the country is getting prepared for record employment growth. Employment levels have already been growing for some time.


For the last three months, industrial employment has been rising at an average of 1%. In the first eight months of the year, the number of industrial workers has risen 5.17%.


“There is no similar figure in recent history, not even in the first years of the Real Plan (the economic plan that changed the Brazilian currency to the Real in 1994, controlling inflation), of a year as promising for industrial employment,” states the report published yesterday by the CNI. Salaries have also risen 12.5% in the period.


After benefiting the durable goods industry, the improvement of laborer income is now reaching the semi-durable goods industry, like shoes, fabrics, and clothes.


The sector performance is directly connected to salaries paid. “It is a sector that has contracted over the last few years,” stated Castelo Branco.


According to forecasts by the Brazilian Central Bank, the Brazilian sector scheduled to grow most this year will be industry, with 6%.


For agriculture, the institution forecasts 4.3% greater revenues.


The service sector, although at a slower level, should also grow. The percentage should be around 2.9%. 


The Brazilian Central Bank (BC) is betting on a 4.4% growth of the GDP for 2004. 


The Brazilian GDP has reached R$ 816.8 billion (US$ 287.6 billion in current figures) in the first half of this year. In the same period last year, the total was R$ 723.5 billion (US$ 254.8 billion, also in current figures).


ANBA – Brazil-Arab News Agency

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’s Democratic Left Threatens to Leave the Workers Party

A new group of congressmen from Brazil’s Workers Party (PT, Partido dos Trabalhadores) who are ...

Brazilian movie director Ozualdo Candeias

Dies the Father of Brazil’s Marginal Cinema

Filmmaker Ozualdo Ribeiro Candeias who died, at age 84, yesterday, February 8, in São ...

Brazil Chips In US$ 12 Million for Global AIDS Drug Fund

Brazil will contribute US$ 12 million for the creation of the International Drug Purchase ...

Brazilians Pay World’s Highest Interest Rates

In many instances Brazilian citizens pay the highest interest rates in the world. According ...

Imports Rise and Exports Fall in Brazil

Brazil’s trade surplus (exports minus imports) amounted to US$ 985 million last week, 26.1% ...

Brazil’s Piracy Costs US Economy Close to US$ 1 Billion a Year, Says Group

The American group Defenders of Property Rights (DPR) today, March 16, announced that it ...

Weak Domestic Demand and Low Investment Make Brazil Ugly Duckling of LatAm’s Recovery

Brazil will have to resist pressures for fiscal easing to sustain high primary surpluses ...

Brazil’s Exchange Surplus Reaches US$ 2 Billion

Brazil's sum of dollar inflow and outflow in Brazil, a.k.a. flow of exchange, recorded ...

Brazil, Argentina and Mercosur Discuss Soybean and Beef Market

The Ministers of Agriculture from the countries that belong to the Southern Livestock Council ...

On the Hot Seat

Found in a trunk 24 years after its author’s death, The Yellow Sofa is ...