Brasília – The Brazilian economy should grow by between 5.5% and 6% this year, with no macroeconomic imbalances and no formation of bottlenecks or bubbles, the Brazilian minister of Finance, Guido Mantega, promised today (12th) while attending the meeting of the national board of directors of the Brazilian Unified Workers Union (CUT).
Mantega also said once again that the Brazilian economy is already running strong, and is back at pre-crisis levels – i.e. those of October 2008 –, and that 2 million jobs should be created this year.
He said that there has been real growth of the minimum wage and a reduction of inequalities, as both the income and size of the middle class have increased, and the lower class, in turn, has become smaller. According to the calculations presented, the middle class already represents over 50% of the Brazilian population.
Regarding the increase of the minimum wage, he stated that currently it has the highest purchasing power when it comes to the basic food basket. “When our administration began, the minimum wage was barely enough to buy the basic food basket. Now, it buys close to two baskets. The purchasing power of the minimum wage has nearly doubled. This is crucial in order to reduce poverty and expand the consumer market,” he said, underscoring that these factors were key in fighting the crisis.
The minister stated that in the face of turbulence last year, consumption declined in other countries, but in Brazil the period was one of strong consumption, because certain segments of the country’s population have higher purchasing power, salaries and income, and thus were able to stimulate trade.
Consumption, according to data supplied by the minister, should grow by between 8% and 8.5% this year. The figure is considered important by the government’s economic team, because businessmen base themselves on it in order to invest. Thus, employment, income and the consumer market all increase, and a virtuous economic cycle is established.
The minister mentioned that the government has been investing in infrastructure, including railways, roads, ports, refineries, high-speed trains, and hydroelectric plants, so as to prevent blackouts like the one that occurred in Brazil in 2001. Mantega also told those attending the CUT meeting that formerly, Brazil had no industrial policy, and that the term was considered a bad word by many.
Mantega also emphasized the strengthening of state-owned enterprises, which to him should always be strong and efficient, and mentioned that the government has provided stimulus to the naval industry, without which Brazil would be dependent on foreign technology. “The State is structuring growth without inefficiencies,” he said.
*Translated by Gabriel Pomerancblum
