The Brazilian National Confederation of Industry (CNI) raised its estimate for this year’s growth in Brazil’s Gross Domestic Product (GDP), the sum of wealth produced in the country, to 3.7%
According to the analysis presented in the Conjunctural Bulletin published Thursday, April 27, the economy will be driven primarily by industry, which is expected to grow 5%.
The forecasts made by the CNI at the end of last year projected increases of 3.3% and 4.2%, respectively, for the GDP and industry.
The bulletin also contends that growth in 2006 will be based on the domestic market, unlike what occurred in previous years, when exports determined the outcome. It is estimated that consumption by families will increase 4.5%, in consequence of lower interest rates and higher incomes.
The reduction in March of the Long-Term Interest Rate (TJLP) to 8.15% per annum, together with the prospects of more dynamic industrial activity, should stimulate companies to make investments, the document goes on to say.
An 8.2% increase in investments is projected. At the end of last year, the CNI estimated investment growth to be 6.5% in 2006.
The CNI expects exports and imports this year to total US$ 130 billion and US$ 89 billion, respectively, resulting in a trade surplus of US$ 41 billion. At the end of last year, the confederation forecast a US$ 43.5 billion trade surplus.
What is happening is that imports are growing at a faster pace than exports. "In the first quarter of 2006, imports amounted to US$ 20 billion, 24% more than in the first quarter of 2005," the document affirms. During the same period, exports expanded 20.2%, to US$ 29.4 billion.