S\u00e3o Paulo \u2013 The Institute of Applied Economic Research (Ipea) disclosed on Thursday (29) a study that shows reduction of public investment in Brazil this year. \u201cIn 2010, the rate of public investment reached the highest level in the period since establishment of the country\u2019s new currency, the real (in 1994), but there are signs of reduction in 2011,\u201d according to Ipea Communique<\/i> N\u00ba 126, entitled \u201cHow is public investment doing in Brazil?\u201d.<\/p>\n
Last year, according to the institute, the rate of public investment reached 2.9% of Gross Domestic Product (GDP), but preliminary figures show that the percentage dropped to 2.5% in 2011. The figures include federal, state and municipal administration, but not that of state-owned companies.<\/p>\n
One of the reasons for the reduction is what the institute calls the \u201celectoral cycle\u201d, that is, investment rises in electoral years and drops in the following year, which is generally one for fiscal adjustment. Last year there were elections for president and state governor. In 2011, those elected complete their first years in office.<\/p>\n
In this respect, the Ipea recalls that in early 2011 the Federal Government announced budget cuts of 50 billion Brazilian reals (US$ 27 billion) and, later, announced plans to expand this total by 10 billion reals (US$ 5.4 billion), confirming the thesis that one year is of heavy investment followed by one year of belt tightening.<\/p>\n
As public investment has grown steadily from 2004 to 2010, the Ipea inquires whether in 2011 there was a reversion of this tendency. The answer is that it is still early to tell for sure, as the figures available are only for the first half of the year and it is necessary to take into consideration the \u201celectoral cycle\u201d, but the institute believes that it \u201cis probable that the rate of investment in 2011 should not return to the same level as that identified in 2010.\u201d<\/p>\n
The study analyses two recent periods, in 1995 and 2003, when growth of public investment was low, and 2004 and 2010, when there was greater investment. To the Ipea, this phenomenon may partly be explained by the change in government guidance as to what should be the state\u2019s part and marks the transition from the Fernando Henrique Cardoso government to the Luiz In\u00e1cio Lula da Silva government. President da Silva and his Worker\u2019s Party, PT, always defended a state with greater participation in the economy.<\/p>\n
Another explanation is the economic growth of the country, which constantly boosts country investment, despite the \u201celectoral cycle\u201d. According to the Ipea, 1% growth in country GDP is accompanies by 0.42% growth in public spending. In this respect, the institute states that the continued tendency for growth in investment \u201cdepends on decisions to be taken in future and on the capacity of authorities to create space for investment.\u201d<\/p>\n
*Translated by Mark Ament<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"
The institute also informs that the rhythm of growth of state investment is due to elections, that is, there is growth in an electoral year and reduction in the following year.<\/p>\n","protected":false},"author":2316,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[91],"tags":[],"class_list":{"0":"post-40272","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-economy"},"wps_subtitle":"The institute also informs that the rhythm of growth of state investment is due to elections, that is, there is growth in an electoral year and reduction in the following year.","_links":{"self":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/posts\/40272","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/users\/2316"}],"replies":[{"embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/comments?post=40272"}],"version-history":[{"count":0,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/posts\/40272\/revisions"}],"wp:attachment":[{"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/media?parent=40272"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/categories?post=40272"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/anba.com.br\/en\/wp-json\/wp\/v2\/tags?post=40272"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}