The president of Brazil’s Central Bank (BC), Henrique Meirelles, calling 2005 a year of adjustments, admitted that growth last year was below expectations. But, speaking to the American Chamber of Commerce in Rio de Janeiro, he said the prospects for 2006 were very good.
Even with sluggish performance in 2005, it was above 2004 and better than most emerging countries, Meirelles pointed out.
He said the Central Bank was doing its part by keeping the country’s economy sound with low inflation that was being kept within strict limits. Meirelles emphasized that countries do not grow with high inflation.
He called the inflation targets "consistent," and added that they were adequate for the country’s growth targets. He pointed out that over the long term, with low inflation, the tendency is for economic expansion and falling interest rates.
According to Meirelles, the external situation at the moment is favorable for Brazil. Meirelles said the reduction of the country’s average net foreign debt from 35.9% of GDP to 14.8% was a strong point.
He also pointed out that the country’s reserves were once again close to 50% of total debt, rising US$ 38 billion in a little over two years. "Reserves reached US$ 53.8 billion at the end of 2005 and continue to rise," he said.
As for foreign debt, it has fallen US$ 80.3 billion over the last five years as the country eliminated its current account deficit, and entered a period of growth accompanied by current account surpluses which is a very good sign, he said.
Meirelles concluded by saying that the result of sound economic policy was higher resistance to shock waves from abroad and the creation of an economy that was much less vulnerable.
On the first week of February, with three working days, Brazil exported US$ 1.293 billion and imported US$ 1.148 billion, with a positive surplus of US$ 145 million.
Throughout the year, the trade balance accumulates exports of US$ 10.564 billion, and imports worth US$ 7.575 billion, with a surplus for the period of US$ 2.989 billion.
The figures were released by the Ministry of Development, Industry and Foreign Trade.
A survey by Brazil’s Federal Mortgage and Savings Bank (Caixa Econômica Federal) shows that last year the balance of its passbook savings accounts rose to over US$ 23 billion, an increase of 8.6% , compared to 2004.
The number of accounts was also up. In 2005, 3.9 million savings accounts were opened, bringing the total to 29 million. For the sake of comparison, in 2000, the Caixa had 13.6 million savings accounts.
Caixa spokesmen say the institution’s target for 2006 is to have 32 million savings accounts with US$ 25 billion.