The most recent weekly analyst survey of the Brazilian Central Bank shows Brazil’s economy on track to grow more than 5% in 2010. Speaking on a call with international media and financial analysts on Wednesday Central Bank president Henrique Meirelles pointed to several macroeconomic indicators showing Brazil’s success navigating through the 2009 global financial crisis.
“After several decades of low growth and macroeconomic vulnerability, Brazil’s economy is now in its strongest macroeconomic position ever,” stated Meirelles.
“The sound macroeconomic policies adopted during the last years, including firm regulatory controls, inflation targeting, a floating exchange rate regime and a fiscal policy that enabled the public debt-to-GDP ratio to decline during the period, enabled Brazil to achieve strong economic fundamentals.”
“Our sound macroeconomic steering through the global financial crisis in 2009 ensured that we only briefly experienced technical recession. This bodes well for the year ahead. Our survey of analysts points to growth of at least 5% GDP for Brazil in 2010,” he added.
In spite of the anti-cyclical measures taken by the government against the crisis, public net debt remained under control in 2009. The Central Bank forecasts that Brazil’s net debt represented 44.1% of GDP at the end of 2009.
Foreign direct investment (FDI) for the year 2009 reached US$ 25.9 billion. Industrial output fell strongly due to the global crisis but recovered quickly, demonstrating 10 consecutive months of growth immediately after the decline.
In addition, unemployment decreased substantially in 2009 to reach the lowest levels in recent history. According to the last Inflation Report of the Central Bank, Brazil’s economic growth forecast is 0.2% in 2009. The final results will only be released in March 2010 by the Brazilian Institute of Geography and Statistics (IBGE).
For 2010, Meirelles stated that Brazil is already on the path of strong growth. The industrial output is expected to increase by 8% according to market projections. The public net debt is expected to continue its downward trend to reach 43% by year-end 2010 and 41% by year-end 2011. Foreign direct investment is forecasted to reach US$ 45 billion.
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