• Categories
  • Archives

Brazilian Industry Blames High Interest Rates for Paltry GDP

The president of Brazil’s Federation of Industries of the State of São Paulo (Fiesp), Paulo Skaf, referred to the 0.3% increase in the Gross Domestic Product (GDP) in the first quarter of this year, as announced by the Brazilian Institute of Geography and Statistics (IBGE), as “piddling.”

“This is the worst result in the last seven quarters and projects an annual expansion of only 1.21%,” he remarked in a note to the press.


“This miserable performance is due to high interest rates, which permitted investments to grow only 2.3%, compared with the first quarter of last year.”


Skaf pointed out that, in comparison with the first quarter of 2004, the Brazilian GDP rose 2.9%, “as against 4.7%, 5.9%, and 5.1% in previous comparisons. It is always well to recall that the global economy will expand 4.4% in 2005. In the first quarter, China experienced growth of 9.1%, and the United States, 3.5%,” he observed.


Besides the result for the first quarter of this year, the president of the Fiesp mentioned that the IBGE revised last year’s growth figure down from 5.2% to 4.9%.


According to Skaf, growth in 2004 reflected the performance of sales abroad, which encouraged investment.


“In 2005, however, everything is happening differently. The increase in interest rates toppled the investments that propelled growth in 2004. These investments still registered a growth of 9.3% in the fourth quarter and a paltry 2.3% in the first quarter of 2005.


“In marginal terms, this meant drops of 3.9% and 3.0%, respectively, in the fourth quarter of last year and the first quarter of this year,” he said in the note.


Skaf also recalled that the growth in exports contributed to the GDP this quarter (13.6%) and in the previous one (16.2%).


“But the enhanced appreciation of the exchange rate in the second quarter will surely have an effect on the contribution of foreign sales to the growth of the economy,” he remarked.


Agência Brasil

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Your email address will not be published.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

Brazilian Embraer’s 20-Year Forecast

Brazilian aircraft maker Embraer, based in the city of São José dos Campos, in ...

Five Challenges to Visit Brazil Through the Eyes of Foreigners Living There

A survey conducted by InterNations, the largest network and information site for people working ...

To End Chaos Brazil Airport Authority Forbids Sale of Tickets

In an attempt to control the chaotic situation in the airports, the Brazilian airport ...

If It Is TV Brazil Why Most Brazilians Were Left Out?

The launch of TV Brasil, Thursday, February 2, may provoke two lines of discussion, ...

It’s the law

After 22 years of discussion, the Brazilian senate has approved a new civil code. ...

Lured by Lower Taxes Brazilians Flock to Car Dealers

In Brazil automobile output climbed in June for the second straight month as car ...

Brazil Joins South America in United Front Against Drugs Patents

The Ministers of Health of ten South American countries have issued a joint declaration ...

Brazil’s Ecotourism Is The Main Drawing Card for Arab Visitors

The sun and beautiful Brazilian beaches are not the main destinations in the country ...

Brazil Grows Close to 10% in 10 Years to 186 Million

Besides being the largest country in territory in Latin America Brazil also has the ...

Brazil’s Lula Complains That Rich Nations Are Not Helping Enough the Poor

During his weekly radio talk to the nation, today, Brazilian President Luiz Inácio Lula ...