Brasília – The economy of Brazil should grow 2.9% this year, according to a report by the United Nations Conference on Trade and Development (Unctad). Despite the deceleration, the performance of the Gross Domestic Product (GDP) of Brazil should be above the average global growth, estimated to reach just 1% in 2009.
According to the international organisation, the country growth should be above the 2.3% average forecasted for Latin America, but below the 4.6% forecasted for developing countries. The economy of Brazil should also grow less than that of emerging nations like China (with estimated growth of 8.4%), India (7%) and Russia (4.8%).
The Unctad forecast is more optimistic than that of financial institutions, which are betting on growth of 2% in the GDP, as shown in the Focus Bulletin, a study promoted weekly by the Central Bank of Brazil. Forecasts, however, are less favourable than those of the government of Brazil. The country budget for 2009 forecasts growth of 4%, but the Central Bank, in its Inflation Report, disclosed at the end of last year, expects growth of 3.2%.
To the Unctad, the main reflexes of the worsening of the international crisis on the country showed up in the reduction of credit, which affected production and exports. "Some emerging market economies, such as Brazil, are already facing severe curtailments in access to trade credit, while the threat of a sudden reversal in private capital flows has heightened," pointed out the document.
The prognosis for developed countries is for recession. According to the report, the economy of the United States should retract 1% this year and that of Japan, 0.3%. In the European Union, retraction should be 0.5%. In the evaluation of the Unctad, the greatest concern for these economies is deflation, which should not only cause retraction in consumption, but reduction in salaries and also a weakening of the economy.
With regard to developing nations, the organisation believes that the crisis has concerning effects on the social advances obtained over the decade. "The vast majority of countries are experiencing a sharp reversal in the robust growth registered during the period 2002-2007. … This trend suggests a significant setback in the progress made in poverty reduction in many developing countries over the past few years," says the report.
*Translated by Mark Ament
