Brazil’s National Industrial Confederation (CNI) has just announced a reduction in its estimate for GDP growth this year from 3.5% to 2.5%.
"Throughout the year the strength of the economy has been weakening. We are about to close out 2005 with less growth than we had last year. Growth will be around 2.5%," explained Paulo Mol, a CNI economist.
The CNI also announced downward revisions of its estimates for the industrial sector as a whole (4.4% to 3%) and the manufacturing sector (4% to 2%).
Mol declared that a nasty combination of high interest rates and the valorization of the local currency (the real) against the dollar had a negative influence over the last 12 months.
"This works against investments," he said, adding that something has to change so 2006 will be better.