Interest Rates Still Too High, Brazil Admits

Brazil’s Minister of Finance, Antônio Palocci, acknowledged that real interest rates are still high on the Brazilian market. But, in his view, a “significant” reduction in these rates has occurred over the last 10 years.

Palocci affirmed that average annualized real interest rates stood at 21.4% in 1997. They declined to 15.8% in 2001 and 2002 and to 13.2% in 2003.


“We are now in the vicinity of 10% real interest rates, which are still high, but they represent the effort Brazil has been making over the years to establish more favorable interest rate conditions for the country’s development,” the Minister told the Economic and Social Development Council at their meeting, November 10.


According to the Minister, the Brazilian government visualizes the process of building long-term, sustainable growth as a construction with foundations, walls, and objectives.


The Minister said that macroeconomic stability represents the foundations of the growth structure.


“All the economic analyses show that there doesn’t exist an example of a country with prolonged growth without macroeconomic stability. On the other hand, it is also important for us not to treat stability as an end in itself, but as the basis of a growth process that requires a set of initiatives and measures on the part of society and the government to promote the most important goal of economic development, which is the enlargement of family income, job creation, growth, and, in a country like ours, a clear commitment to the reduction of poverty and inequality,” he said.


Economic policy, according to Palocci, is reflected in the growth of the Gross Domestic Product (GDP).


The Minister recalled that the GDP declined during the first two quarters of last year, since that was the period when monetary readjustment was strongest.


Continuous Growth 


Nevertheless, Palocci affirmed, the GDP recovered before the end of 2003, and Brazil has had five straight quarters of GDP growth. Over the past 12 months the GDP has grown around 5.5%.


“We are now in the sixth quarter in which the growth indicators remain positive, which is reflected in the increases in production, employment, and the income of workers and Brazilian firms,” the Minister remarked.


The creation of jobs represents another mirror of economic growth, according to the Minister. Palocci referred to IBGE (Brazilian Institute of Geography and Statistics) data that indicate increases in employment rates in the six major metropolitan areas of Brazil.


According to Palocci, the data show that there has been a change in investment behavior in Brazil, setting more store on regions in the interior of the country, where the evolution of the employment rate has been more pronounced.


“This is a structural change, which has to do with the evolution of agribusiness, family farming, adequate funding for these sectors, and the advances in productivity these sectors are attaining in Brazil, as well as in the areas of infrastructure development and the production of industrial inputs, which generally come from the interior,” he affirmed.


Agência Brasil
Translator: David Silberstein

Tags:

Ads

You May Also Like

Investors Buoyed Up by Brazil’s Good News

Brazilian shares went up, November 30, as a pullback in oil prices, weakness in ...

The Alchemist Is 20. Brazilian Paulo Coelho Celebrates Across the Web

To celebrate the 20th anniversary of The Alchemist's first release in Brazil, Brazilian author ...

Flower Exports Blooming in Brazil

Brazilian flower and ornamental plant export has generated US$ 18 million between January and ...

Brazil Threatens to Suspend U.S. Movies and Software Rights

The Brazilian Congress is considering the suspension of intellectual property rights of American products ...

Brazil Might Enjoy European Living Standard If It Had Kept Growing as in the 60s and 70s

The biggest economic question facing Brazil, as for most developing countries, is when it ...

FIT 0/16: Fashion for the Little Crowd, Brazilian Style

The São Paulo Fashion Week ends this Monday, January 21. But the southeastern Brazilian ...

Brazilians Want Foreign Trade Policy That Will Make Them Competitive

The main suggestion presented by Brazilian businessmen who operate in foreign trade in Brazil ...

Brazil Lowers Expectations for Corn and Soy Crops

Due to drought in Brazil's southern states, crops of corn and soybean in the ...

Brazil Teaches the World How to Stop Smoking

The slogan “Smoking is a goal against your own side” was launched in Brazil by the ...

Brazil Is Sending Technicians to Help Chavez Deal with Energy Crisis

President Hugo Chavez of Venezuela, faced with serious electricity and water problems,  has asked ...