Brasília – The International Monetary Fund (IMF) issued a report this Monday (11th) containing economic growth projections for developed and developing countries in 2011 and 2012. According to the IMF estimates, average annual growth should be 4.5% during the period. In the case of Brazil, the growth estimate is 4.5% for 2011 and 4.1% for 2012. The Fund warns global leaders to beware of rising commodities prices, among them oil.
The IMF warns that although the outlook for global economic recovery is a positive one, threats are posed by rising unemployment and the danger of overheating, especially in developing and emerging countries.
In the case of Brazil, the government is taking measures to adjust the economy, balance the exchange rate, increase exports and keep inflation in check, such as credit restrictions and cuts in the General Federal Budget, among others. According to estimates of the Ministry of Finance, the Brazilian economy should record an annual growth rate of between 4.5% and 5% from 2011 to 2014.
"Given the improvement in financial markets, buoyant activity in many emerging and developing economies, and growing confidence in advanced economies, economic prospects for 2011-12 are good," the IMF report informs.
However, the economist-in-chief at the institution, Olivier Blanchard, warned that commodities prices have risen "more than expected." According to him, the price hike, combined with strong growth in demand and a series of supply shocks, may get in the way of the economic recovery process.
According to the report, the Gross Domestic Product (GDP) of advanced, emerging and developing economies should grow at rates ranging from 2.5% to 6.5%. The report warns of elements that may prevent countries from reaching the forecasted growth rates, such as increasing food and commodities prices, as well as rising social and economic tension in the Middle East and North Africa.
As a result of conflict and instability in Muslim countries, international political leaders have claimed that oil barrel prices have claimed that oil barrel prices are on a rally and have led to increased prices at gas pumps worldwide.
The report also mentions the consequences of the earthquake followed by a tsunami that took place in Japan a month ago, as it should cause "global macroeconomic impact." According to the document, "many challenges remain naddressed," especially in some European countries.
To the IMF, advanced economies must adopt low interest rate policies, greater control over public spending, fiscal consolidation plans and budget and institutional reforms. In the case of the United States, advice is given for broader measures to be adopted in social security and tax reforms.
*Translated by Gabriel Pomerancblum
