Brazil to Grow 5.5% This Year

Brazil’s minister of Development, Industry and Foreign Trade, Luiz Fernando Furlan, believes that the growth of the Brazilian economy in 2004 may reach 5.5%. In the first half of the year, the Minister bet on a 4% increase in the country Gross Domestic Product (GDP), and the government target was 3.5%.

“This is a positive year, it is a championship that is ending, it is a cup that will go to the room of memoirs,” stated Furlan, December 20, in Rio de Janeiro.


According to the Minister, the performance of industry, trade, services and, especially, of exports makes him believe that this figure may be reached.


Studies by the Brazilian Central Bank at the beginning of the month, together with the financial market, showed perspectives of 5% growth of the GDP. In the first half of the year, the market bet on a growth of 3.5%.


At the end of November, the Brazilian Institute for Geography and Statistics (IBGE) published a study that shows that, between January and September, the Brazilian economy grew 5.3%.


To Furlan, Brazilian exports are going to exceed US$ 94 billion this year, and the trade balance surplus should reach US$ 32 billion.


Up to the third week of December, Brazilian shipping generated US$ 92.5 billion and imports US$ 60.7 billion. Exports rose 29.9% this year and imports 28.5%. Last year, foreign sales rose 21%, and imports rose just 2.22%.


According to the Minister, the increase in foreign purchases is also a positive fact for the country.


“It is a healthy growth that shows that the domestic market is demanding more foreign products, especially raw materials, components, capital goods, but also consumer products that one way or the other helped stimulate competitiveness of the domestic market,” he declared.


For next year, Furlan maintained a forecast of US$ 100 billion in exports, which means that the growth of shipping should be lower than that registered in 2004, and the trade balance result should drop.


“Even so, the trade balance surplus should end the year at twenty something billion dollars,” declared the Minister, to whom the lower trade balance surplus will not have a negative impact on the Brazilian economy.


He believes that the country is getting ready to overcome possible foreign problems in the future.


“I believe that in the last two years the Brazilian health has improved very much. So has the fitness. We are in much better conditions to overcome possible problems on the foreign market. We have very positive figures,” he declared.


But the Minister does not deny his worry with the maintenance of export levels, this is so true that he stated that the performance of foreign trade, together with job generation, will be the main worries in his ministry in 2005.


In this respect, he mentioned a series of cares that must be taken to maintain the positive figures, among them investment in infrastructure, the reduction of interest rates and an exchange rate that stimulates exports.


To Furlan, an ideal exchange rate would be around R$ 3 to US$ 1. Yesterday the dollar ended the day at R$ 2.676, the lowest level since June 2002.


Furlan also stated that the government is going to work on completing the trade accord between the Mercosur and the European Union in 2005.


According to him, in the first quarter there should be a ministerial meeting between both blocs so as to discuss the matter. Negotiations were stopped at the end of October 2004.


ABr
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