Estimates for Brazil’s Growth and Investments Fall Sharply

The estimate by Brazil’s Applied Economic Research Institute (Ipea) for a rise of 5.3% in investments this year has been reduced to 0.9%.

A consequence of less investment is that the Ipea has also lowered its GDP growth forecast for 2005 from 3.5% to 2.3%.

This comes on the heels of the announcement of a drop of 1.2% in GDP growth in the third quarter.

"The new estimates reflect what happened in the third quarter when performance was much worse than expected," explained Fabio Giambiagi of Ipea.

The Ipea has also revised its GDP growth estimate for next year, lowering it from 4% to 3.4%.

The only Ipea forecast that continues to rise is for exports, where performance remains strong. In September the Ipea estimate was for an increase of 11%, which is now 11.9%.

ABr

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