Interest Rates Still Too High, Brazil Admits

    Brazil’s Minister of Finance, Antônio Palocci, acknowledged that real interest rates are still high on the Brazilian market. But, in his view, a “significant” reduction in these rates has occurred over the last 10 years.

    Palocci affirmed that average annualized real interest rates stood at 21.4% in 1997. They declined to 15.8% in 2001 and 2002 and to 13.2% in 2003.


    “We are now in the vicinity of 10% real interest rates, which are still high, but they represent the effort Brazil has been making over the years to establish more favorable interest rate conditions for the country’s development,” the Minister told the Economic and Social Development Council at their meeting, November 10.


    According to the Minister, the Brazilian government visualizes the process of building long-term, sustainable growth as a construction with foundations, walls, and objectives.


    The Minister said that macroeconomic stability represents the foundations of the growth structure.


    “All the economic analyses show that there doesn’t exist an example of a country with prolonged growth without macroeconomic stability. On the other hand, it is also important for us not to treat stability as an end in itself, but as the basis of a growth process that requires a set of initiatives and measures on the part of society and the government to promote the most important goal of economic development, which is the enlargement of family income, job creation, growth, and, in a country like ours, a clear commitment to the reduction of poverty and inequality,” he said.


    Economic policy, according to Palocci, is reflected in the growth of the Gross Domestic Product (GDP).


    The Minister recalled that the GDP declined during the first two quarters of last year, since that was the period when monetary readjustment was strongest.


    Continuous Growth 


    Nevertheless, Palocci affirmed, the GDP recovered before the end of 2003, and Brazil has had five straight quarters of GDP growth. Over the past 12 months the GDP has grown around 5.5%.


    “We are now in the sixth quarter in which the growth indicators remain positive, which is reflected in the increases in production, employment, and the income of workers and Brazilian firms,” the Minister remarked.


    The creation of jobs represents another mirror of economic growth, according to the Minister. Palocci referred to IBGE (Brazilian Institute of Geography and Statistics) data that indicate increases in employment rates in the six major metropolitan areas of Brazil.


    According to Palocci, the data show that there has been a change in investment behavior in Brazil, setting more store on regions in the interior of the country, where the evolution of the employment rate has been more pronounced.


    “This is a structural change, which has to do with the evolution of agribusiness, family farming, adequate funding for these sectors, and the advances in productivity these sectors are attaining in Brazil, as well as in the areas of infrastructure development and the production of industrial inputs, which generally come from the interior,” he affirmed.


    Agência Brasil
    Translator: David Silberstein

    Tags:

    • Show Comments (0)

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Ads

    You May Also Like

    In Brazil, OPEC Chief Predicts Whole Word Will Add Alcohol to Gas

    OPEC’s (Organization of the Petroleum Exporting Countries) president, Edmund Daukoru, is in Brazil where ...

    Authorized Use of Leishmaniasis Vaccine Made in Brazil

    The world’s first leishmaniasis vaccine received authorization from the Ministry of Agriculture to be ...

    Brazilian Labor Minister Luiz Marinho

    Brazil Creates a Quarter of a Million Jobs This Year

    In February, 148,019 formal jobs were created in Brazil, according to a report published ...

    Brazil's Lula laughing

    In the Americas No Leader Is More Popular than Brazil’s Lula

    Brazilian President Luiz Inácio Lula da Silva with 70% approval is the most popular ...

    Justice statue in Brasília

    Brazilian Justice Can’t Reach Goals of Working Faster and Spending Less

    In Brazil, at the beginning of last year, the Brazilian Judiciary branch set itself ...

    Weak Domestic Demand and Low Investment Make Brazil Ugly Duckling of LatAm’s Recovery

    Brazil will have to resist pressures for fiscal easing to sustain high primary surpluses ...

    Harvesting in Brazil

    Deceitful and Inconsistent, Brazil Is No Third World Champion

    The latest round of WTO negotiations has been nothing if not dramatic, and in ...

    Corruption Probes Slow Down Brazilian Bulls

    Latin American markets closed the day mixed, with Brazil and Argentina rising while Mexico ...

    Brazilian Northeast Gets New National Heritage City

    Marechal Deodoro, in the northeastern Brazilian state of Alagoas, will be the newest city ...

    Girl from Ipanema Revisited

    We were 2 years into the project of re-translating some classic bossa nova tunes ...