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Brazil’s Latest Growth Projection for 2006: No More than 3.3%

 Despite optimistic projections by President Luiz Inácio Lula da Silva and Finance Minister Guido Mantega who are betting that Brazil will grow 4% this year, Ipea (Institute of Applied Economic Research) a branch of Brazil’s Planning Ministry, says that the Brazilian GDP will not grow more than 3.3% this year.

In fact, the Ipea has revised downwards most of its growth targets for 2006. In its previous forecast the Institute was anticipating a 3.8% GDP increase this year.

The Ipea’s quarterly bulletin published today, September 6, also downplays the growth of exports (from 5.3% to 4.5%), of imports (from 14.7% to 14%), of families expenditures (from 4.8% to 4.3%) and of investments (from 7.8% to 6%).

The forecast for services growth fell from 2.7% to 2.4% and the one for agriculture went down from 2.5% to 2.3%. As for industrial production the reduction was even more pronounced: from 5.3% to 4.2%.

The Ipea also revised downwards its inflation projection from 4.4% to 3.2%, way below the 4.5% target established by the government. According to the Institute, the Brazilian inflation  should top at 4.5% in 2007.

On the positive side, the Ipea increased its trade balance estimate from US$ 40.4 billion to US$ 43.6 billion for this year. This number should fall to US$ 40.1 billion in 2007, however.

The current account balance for 2006 also got a better outlook: instead of the previously projected US$ 8.4 billion, the Ipea is now expecting US$ 10.6 billion by year’s end.

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  • Show Comments (1)

  • ch.c.

    It looks to be even much bleaker than that !
    FIESP and CIESP reduced your 2006 GDP growth estimates at………..2 % ! Yesssssssss………

    Sorry for you and sorry for Lula and his gang of liars. Rosy estimates were already provided for 2005. Results……results were
    far below the lowest estimates. Therefore nothing has changed. Your government is just unable to manage properly your GDP growth rate. They are quite more effective in corruptions. In corruptions yolur growth rate is probably the world highest whereas you get almost the world lowest growth rate in your GDP growth rate.

    And to penalize and punish those responsible…….you re-elect them !

    Truly funny !

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