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Trouble in US and EU Won’t Slow Down Brazil, Says Minister

Brazilian industry Guido Mantega, the Brazilian Finance Minister, said that "for the moment" there's no reason to change Brazil's growth estimate of 5% for 2008, in spite of global recession fears, which he believes will impact most on developed countries.

"There's nothing telling us we should abandon our optimism," stated Mantega during a meeting with the press in Paris where he is holding talks with top officials from the French government.

When asked about the fact that the Brazilian Central Bank estimate is 4.5% GDP expansion in 2008, Mantega reiterated that for 2008 "the government's estimate is 5%" and added that the Central Bank can be "more conservative" but for the Executive as long as new elements don't emerge "we keep to our estimates."

Mantega admitted that there was a slowdown of the world economy which is affecting mainly the rich countries but which "should not have a great impact" for emerging economies such as Brazil. And if they suffer "it will only be marginally."

"This crisis is showing the importance of emerging economies for the world" since they are helping compensate the deceleration in developed countries, he pointed out emphasizing "that is one of the main reasons why emerging countries should have a louder voice in decision making processes in such organizations as the G7 or the IMF".

Mantega said that the latest manufacturing data from the state of SΓ£o Paulo, the power horse of Brazil, showed a solid growth of 6.1% in the last twelve months to December compared to the same period in 2006, even when December experienced a minor seasonal adjustment of minus 1.3% when comparted to last November.

Data released by SΓ£o Paulo's Federation of Industries, FIESP, indicates that the 6.1% manufacturing expansion of 2007 was the highest since 2004, and was double the rate of 2006, 3%. FIESP said they had originally forecasted a 5% growth.

"In 2007 the domestic market expanded far more than expected given higher employment and greater take-home pay checks. Credit also expanded reaching a record 35% of GDP," explained Walter Sacca, deputy head of FIESP Economics department and a member of the visiting delegation.

"2008 has begun strongly, with industry investing and hiring more people. Manufacturing activity in SΓ£o Paulo should grow in the range of 5%," said Sacca.

According to FIESP, SΓ£o Paulo's manufacturing utilization capacity reached 81.9% in December, compared to 84.1% in November and 77.8% in December 2006.

Mercopress

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  • Show Comments (9)

  • A Brazilian

    [quote]Economic “CLOUPLING” in the true sense will never happen again! Brazilian economy is too diversified and the exports show exactly that. [/quote]

    I have heard that. Most part of Brazil’s economy isn’t tied to the US, it means that we are the only country in the whole continent that has this kind of independence. Not even Canada can say the same.

  • Steve K

    JC… I was in the countryside of Sao Paulo State, last month. I overheard and saw (with my own eyes) their vast economical growth. Brasil is a country filled with absolute determination, to be the best they can be. They are doing an excellent job in trying to narrow the gap between the lower and upper economical classes. Personally, I do think this government is maintaing the right course of action. Every national government in the world has some form of corruption. There is nothing you can do to correct that. The sugarcane growth all along the coutnryside is unbelievable. That industry, along with various others are gong to succeed. I have seen more newer cars on the road, compared to the last time I was there 6 months ago. Brasil should not let our mortgage problems and huge debt in the US get them down. They have to show the world they can succeed. Eu amo Brasil! πŸ™‚

  • jc

    jay
    It depends where you are in Brazil, you can easily quadruple your real state investment in the northeast state of RN. The indicators in Brazil donÀ’€ℒt work like in the States.
    Consumer confidence index is up, the construction sector in booming, the cement factories can’t produce fast enough, the automobile sales is up, electronics is up; electro domestic is up, even recreational toys like boat sales motorcycles are up, Supermarkets sector is booming, etc etc. So to say that it will be some shockwaves felt from the US economic disaster the answer is YES, but that is about it. Economic “CLOUPLING” in the true sense will never happen again! Brazilian economy is too diversified and the exports show exactly that.

  • JAY GLENN

    Property Prices in Brazil
    We have been tracking beach properties in Marica for 18 months.
    Four properties have gone up in price then came down to lower than 18 months ago.
    We purchased a four bedroom condo 02/07. The unit next door just sold for less, than ours.
    I think thatÀ’€ℒs a negative economic marker.
    The dollar is lower but the R$ prices have been lowered more.
    Some of these properties are for sale more than two years.
    The World economy wonÀ’€ℒt affect Brazil, It already has.

  • Jc

    RIC
    The question isÀ’€¦ who is dying and who is whistling!
    If the US is counting on “Coupling” to bring everybody down, I don’t think it will happen. Would like to hear AES opinion on this.

  • Ric

    Whistling in the Graveyard
    Like the article in this week’s Veja.

  • baba

    to not so wassa!!!
    The short answer to is “the middle east” in case you don’t know there’s something cooking called globalization “not so wassa! πŸ˜‰ πŸ˜‰ πŸ˜‰ πŸ˜‰ πŸ˜‰ πŸ˜‰ πŸ˜‰

  • I donÀ’€ℒt think you are waza
    You are more like a À’€œbottom of the food chainÀ’€Â weasel!

    Costinha

  • wazza

    This guy Mantega give the name ‘dumb ass’ a new meaning.
    Where in the hell are emerging economies going to sell their products and services if not to the so called first world countries or does he think that Argentina, Mozambique Angola etc are going to pick up the slack? He’s a complete asshole…………!!!!

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