Brazilian Industry Expecting 3.2% GDP Growth for Brazil in 2005

Brazil’s National Confederation of Industry (CNI) revised the projections it made in March for this year, considering the downward direction of inflation and the government’s annualized benchmark interest rate (Selic).

“The economy should resume growth this semester, but without the same vitality as in the second half of last year,” the coordinator of the CNI’s Economic Policy Unit, Flávio Castelo Branco, explained in a collective interview.


Whereas the government estimates that this year’s primary surplus (the difference between federal revenues and expenditures, excluding interest payments) will amount to 4.25% of the Gross Domestic Product (GDP), the CNI is projecting a 4.5% primary surplus.


For the Selic rate, the forecast is that it will close the year at 19.1%, as against the 18% announced in March. The projection for GDP growth this year is 3.2%, driven by industry, which the CNI expects to expand 4.2%.


Castelo Branco says that the predictions for the GDP and for industry are predicated on lower interest rates.


Agriculture is expected to grow 2.3%; mining, 11.5%; manufacturing, 3.8%; construction, 2%; and tax revenues, 4.7%.


Other estimates drawn from the CNI’s Conjunctural Note, released at the interview, are for a 2.9% growth in family consumption for the year, a 1.3% growth in government consumption, a 12.3% increase in exports, and a 12.5% increase in imports, compared with 2004.


The only forecast that remained unchanged from March was for this year’s Broad Consumer Price Index (IPCA): 6%.


“Inflation took a strong dip in the second quarter, in both wholesale and retail prices, and even registered negative rates,” the Conjunctural Note observes.


In March the CNI forecast a GDP of 4%, which was revised to 3.2%. Projected growth in industrial GDP was lowered from 4.8% to 4.2%, and physical production in industry, from 4.8% to 3.8%.


The estimate for exports in 2005 was raised from US$ 108 billion to US$ 114 billion, while the estimate for imports remained unchanged, at US$ 76 billion.


The forecast for the government deficit went from 2.4% of the GDP to 3.2% of the GDP, while the projected ratio of net government debt to the GDP was raised from 50% to 50.5%.


The Conjunctural Note also predicts the “start of a downward cycle in the Selic rate beginning in the third quarter” and remarks that “the bigger the drop during the rest of the year, the greater the investments that will be drawn to the country.”


ABr – www.radiobras.gov.br

Tags:

You May Also Like

World Bank Warns Brazil: ‘You Need to Invest in Infrastructure’

The vice-president of the World Bank (IBRD – International Bank for Reconstruction and Development) ...

Brazil’s 2006 Account Surplus Reaches US$ 2.5 Bi, 37% Less Than Last Year

Brazil’s foreign accounts continue on the upswing, and the country’s balance of payments, which ...

33% of 23,000 Brazilians Deported Are Women, Many Victims of Sex Rings

A large portion of the Brazilian women deported from or refused permission to enter ...

With a Little Promotion Brazil Could Become More Attractive to Arab Investors

Agribusiness is one of the most promising Brazilian sectors for the attraction of Arab ...

Tom Jobim and Vinicius, the Brazilian Odd Couple Who Started It All – Part Two

By now it should be apparent the lone, dissenting voice crying out in the ...

Able to Build Cheaper Cars than Brazil, Mexico to Become Top Car Producer in LatAm

Pacific Alliance member Mexico is poised to overtake Brazil, the leading economy in Mercosur, ...

Brazil Has Already Freed 16,407 Slave Workers

Brazil’s Ministry of Labor’s Special Mobile Inspection Group freed 79 workers from slave labor ...

Arabs Buy US$ 1 Billion from Brazil, a 70% Boost

Exports from Brazil to the Arab countries reached US$ 989 million in October, growth ...

Brasília’s Corruption Case Delayed. Main Witness Also Has Rap Sheet

Brazilian Durval Barbosa, the man who accused some 30 politicians and contractors of Brazilian ...

A Double Look

One Final Clarification By JB Kennedy From 1967 to 1973 the Jornal do Brasil, ...

WordPress database error: [Table './brazzil3_live/wp_wfHits' is marked as crashed and last (automatic?) repair failed]
SHOW FULL COLUMNS FROM `wp_wfHits`