São Paulo – The crisis in Europe, difficulties for recovery of the North American economy and the high cost of production in Brazil are some of the reasons causing economists to evaluate the Finance Ministry’s growth forecast disclosed this week as "optimistic". According to the "Brazilian Economy in Perspective” report, the country’s economy should grow at an average rate of 4.8% a year between 2011 and 2014.
The study estimated growth of 3.2% in the first three quarters of 2011 and estimated growth of 4.5% in Gross Domestic Product (GDP) this year, 5.5% in 2013 and 6% in 2014. According to the report, "after accommodation in 2011, the economy of Brazil should speed up”. To the Ministry of Finance, the average expansion of GDP by 2014 should be 4.8%, higher than that of the four previous quarters. Between 2007 and 2010, the country GDP grew on average 4.6%.
The Economics Professor at the Pontifical Catholic University of São Paulo (PUC-SP), Maria Cristina de Mello, said that the forecasted growth of 4.8% presented by the Finance Ministry is "optimistic".
Mello recalled that Europe forecasts small growth over the next five years and that the United States is living a difficult period. Japan is facing structural problems in its economy and is still recovering from the 2011 tsunami.
According to Mello, the countries that make up the bloc called BRIC (Brasil, Russia, India and China) and South Africa are growing. However, they depend on the good financial help of their peers in the developing market. "China sells much to the United States and Europa, which are living a crisis. A reduction in economic activity in China will automatically affect Brazil,” she said. Among the domestic problems, for example, Brazil needs to work on the tax reform.
A professor at the Economics Institute at the University of Campinas (Unicamp), Daniela Magalhães Prates also evaluates the Finance Ministry’s forecast as optimistic. "This year, if there is no catastrophe in Europe and Brazil grows 3.5%, that may be considered very good,” she said.
Prates points out that the foreign scenery has “few sources of dynamism” to help boost the growth of Brazil. The growth forecasted for 2013 and 2014, of 5.5% and 6%, respectively, are more realistic than the growth forecasted for this year, pointed out the professor.
After a meeting of the Political Council, on Tuesday (14) at Planalto Palace, the seat of the government of Brazil, Finance minister Guido Mantega said that investment in the country should grow by over 10% this year, and once again stated that the country’s growth should reach 4.5% in 2012.
"We have a challenge ahead, which is to swim against the tide. While some countries are slowing down, including some emerging nations, Brazil should grow more than in 2011,” said Mantega. He also stated that the country’s growth depends on other nations and observed that, if the crisis worsens, the country may grow less: 4%.
*Translated by Mark Ament
