Brazil’s Export Boom Turning to Bust, Warns Industry Federation

    Brazil’s main manufacturing organization warned that in the coming three years the country’s strong export thrust – 20% annual growths since 2003 – will begin to rapidly exhaust.

    "Exports are an important source of growth for industry, manufacturing and farming but that source is running out," said he Sao Paulo State Federation of Industries, Fiesp during an open forum on Brazilian exports prospects.

    Paulo Francini, head of Fiesp’s Economic Research and Studies Office said that the export boom end could happen in the "short term, if by short term we are referring to a period of one to three years."

    Exports benefited from an increase in international prices that is "closely linked to favorable temporary conditions such as the world’s economy expansion – which is cyclical –  and commodities prices," he said.

    "The loss of exports dynamism will have a strong impact on employment since the majority of sectors with difficulties in sustaining overseas sales are labor intensive," pointed out Francini.

    Since 2003, Brazil’s overseas sales expanded at an annual rate above 20%, while world exports only did at 10%.

    However given the strong appreciation of the Brazilian currency, real, in 2006, export growth will be closer to that of world sales: 13% and 8.8%, highlighting that since 2003, the US dollar in Brazil has experienced "an accumulated depreciation of 30%".

    The Brazilian government forecasts exports of US$ 132 billion this year (11% over 2005) and imports of US$ 90 billion (up 22%) with an annual surplus of US$ 44 to 45 billion.

    Brazilian Central Bank estimates that the economy will expand 3.1% this year and 3.5% in 2007. Inflation will be in the range of 3.3% and in 2007 between 4.4 and 4.5%.

    Another interesting data which was released this week shows that for the first time in ten years, Brazilian workers’ average real income during 2005 increased (4.5%), but still is 15% below ten years ago.

    Lower inflation expectations and a higher minimum wage in 2005 played a crucial part in reversing the ten year tendency. Brazil is also one of the countries in the world with the worst income per capita distribution.

    Brazilian employment figures were also encouraging. The percentage of people employed, above ten years of age, over total population in 2005 reached 57% which compares favorably with the 56.5% of 2004.

    However in spite of the good 2005 showing, the best since 1996, the percentage of Brazilian population employed is still below the average of the first half of the nineties, indicate official Brazilian statistics.

    Mercopress

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    • Show Comments (1)

    • ch.c.

      Yeahhhh ! That is exactly what I have been telling you all along for over 1 year !

      – You are proud of ethanol : sugar prices went down 40 % since last February.
      BOOM or BUST ?
      Your economic growth rate was the lowest fo all developing nations and even lower than most LDC countries ?
      – Did you miss the train in which there was a Boom from 2003 to 2006 ?
      – Despite your lower interest rates, you still have the highest rates after inflation in this planet ! Is that so great ? Who is going to be penalized ? You……the taxpayers….of course !
      – You reduced your foreign debts only by issuing far more local debts. Is that a debt reduction ? Noooooooooooo !!!!! Only a FOREIGN debts reduction.
      Worse : even a stupid debt reduction to repay loans bearing a far lower interest rate than the newly issued borrowing ! That is quite an auto goal ! Can you realize why the financial world applauded what you did ? They made far more profits they otherwise would have done ! What a joke……..your government ! Just make them believe how good they are and they will do whatever is necessary to get further compliments but no seeing where the trap is/was !
      – You could be proud to have the highest poverty rate in the world when compared to your GDP per capita !
      – You could be proud to have 50 % of your youths deaths aged 15-24 dying from violent crimes !
      – You could be proud of your Congressmen absolving their guilty peers of corruption….in a secret vote….of course !
      – You could be proud to have a President self complimenting himself of his achievements…..when the reality is that HE failed in almost all comparative statistics !
      – You could be proud to have a President corrupted to the roots and lying through his
      teeths !

      In fact being proud of being a Brazilian is fine ! You are so proud…..that you became blind and earless of what the sad reality is ! You cant even figure out that you rank miserably and lamentably in many comparative statistics even with your peers that are already not so well ranked overall !

      You are so blind…..that you re-elect the Emperor of all Corruptions : His Highness…Lula !

      And you are so badly educated……that you swallow what his Highness says about Himself and his apparent achievements !

      Brazil is not a miracle economy but only a…..MIRAGE economy !

      Why do you believe that your nickname is : BOOM AND BUST economy ?
      Just look at your economic performance of the last 4 years or the last 200 years.
      No difference !

      You are simply loosers who believe that you are winners.
      You live in an archaÀƒ¯c country with a medieval oligarchy.

      As to your justice….it is a constitution of total impunity for your corrupted and criminal oligarchy !

      The only sustainability you have is corruption and impunity !

      And if you really want to evolve and develop, WAKE UP AND STAND UP !

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