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Taxes and High Interests Are the Main Bad Guys in Brazilian Economy

The Getúlio Vargas Foundation’s (FGV) Brazilian Economics Institute (IBRE) announced the results this Tuesday, February 14, of its Conjunctural Survey of Manufacturing Industries.

The study reveals that, for business owners, taxes are the prime hindrance to economic growth in Brazil. Interest rates appear in second place on the villains list.

In the survey, conducted for the third consecutive year, 43% of the 1003 companies interviewed named taxes as the prime factor limiting economic growth.

However, when compared with 2005, there was a decrease of 12 percentage points in the percentage of firms that ranked this item first.

Interest rates were ranked first by 33% of the companies interviewed, 14 percentage points more than gave it first ranking last year. The third most important factor limiting economic growth, in the eyes of the entrepreneurs, was domestic politics, which also received a larger percentage of first-place mentions this year than last: 7%, compared with 2%.

There was a big reduction, on the other hand, in the percentage ranking deficient infrastructure first: 5% this year, as against 17% in 2005.

The survey also included items related to what industries plan to invest in 2006 and over the three-year period 2006-2008 in increased production capacity.

The results show that the average growth in production capacity projected for this year is 8%, more than the 7% projected at the beginning of 2005.

For the 2006-2008 period, the average projected expansion was 17%, less than the 19% projected in January, 2005, for the three-year period covering 2005-2007.

Nevertheless, the study judges that "the current result is comparable to that of recent periods of economic growth, with the implicit expectation that installed capacity will increase at an annual rate superior to 5%."

Agência Brasil

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  • Guest

    AND EVEN MORE PRECISELY……
    ….. LULA, PALOCCI, MEIRELES…..AND ALL
    THE POLITICIANS AND HIGH RANKINGS OFFICIALS WHO VOTED AND DECIDED FOR THESE TAXES AND INSANE INTERESTS RATES.

    THEY ARE SO STUPID…..THAN WHEN YOU READ WHAT THEY SAY….THEY DONT EVEN UNDERSTAND WHY YOUR CURRENCY IS BOOMING AGAINST ALL WORLD CURRENCIES.

    EVERYTIME THEY SAY THAT IT IS THE DOLLAR THAT IS WEAK !!!!!!! A TRUE JOKE THESE ” FINANCIAL EXPERTS” JUNKIES !!!!

    BUT THEY DONT CARE PAYING SUCH INTERESTS RATES.

    Afterall, the government borrowings and interests rates are not repaid by them….BUT BY YOU BRAZILIANS CITIZENS !!!!

    They are just borrowing in YOUR NAME !

    Struggling…you will be again….sooner rather than later !
    Once more the Brazilian Society will have to repay the mismagement and total failure of their government.

    SAD…but the bill will be presented to you once more. And this time no one could any longer accuse the IMF ot whoever external to Brazil. The Brazilian government reduced by much the foreign debts but increased by far more the debts in your local currency.
    They increased your local debts by a stunning 21 % in 2005 ALONE.

    So stupid they are…. they have reduced their foreign debts having a far lower rates than the debts they issued in local currency, and even worse at a time while your currency is gaining value !!!!!

    Just think of it : this is like a DOUBLE AUTOGOAL !!!!!!

    Can anyone realize by now….. why foreigners are buying your government debts ??????? fOREIGNERS ARE BLESSING YOUR GOVERNMENT AND IMPLORE THEM TO ISSUE EVEN MORE DEBTS WITH SUCH CRAZY INTERESTS RATES….OR EVEN LOWER !!!!!

    IT IS THE BEST GIFT FOREIGN INVESTORS HAVE FOR THE LAST SEVERAL DECADES :
    an appreciating currency, better repayment capability, and paying over 10 % AFTER INFLATION, guaranteeed by the government.

    A BETTER SCENARIO THERE IS NOT !!!!!
    ON THE OTHER HAND IF IT IS SUCH A GOOD DEAL FOR LENDERS, IT CAN ONLY BE THE OPPOSITE FOR THE BORROWER : YOU BRAZILIAN CITIZENS !!!!!!!

  • Guest

    NOOO ! THE ONLY BAD GUYS…..
    ARE THOSE THAT DECIDED OF THESE HIGH TAXES AND INSANE INTERESTS RATES !!!!!!

    OR MORE PRECISELY……. THE GOVERNMENT … BY DEFINITION !!!!!!!

  • Guest

    Does incompetence fair in this equation? Who creates the policies for taxes or manages the interest rates?

    What about a conference on Anti-Corruption and how to indentify and eliminate this menace? The Bad Guys are a different issue altogether.

    Come on lets get real now!!!

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