I’m supposed to be spending two weeks covering for the Financial Times correspondent, who is otherwise engaged. But it’s been tough getting the editors in London interested in Brazil stories.
The FT covers Brazil more thoroughly than any other British paper but they’ve been short staffed and the Haitian earthquake and Obama’s troubles in the US have taken up what little time they have.
Last Thursday I proposed we do a piece on the Finance Minister’s targets for 2010 and they agreed it was worth 300 words. But the piece was edged out at the last minute. So here it is, almost exactly as I filed it
By ANDREW DOWNIE
SÃO PAULO, Brazil – Brazil’s economy will grow by 5.2 percent this year and should maintain that level of around 5 percent annual growth until at least 2014, the country’s Finance Minister said Thursday.
Guido Mantega also estimated domestic demand would grow by 7.3 percent after a flat 2009. Industrial production should leap to 7.1 percent from an estimated fall of 5.3 percent least year, boosted by government infrastructure programs and spending to prepare the country for major events like the 2014 World Cup.
Mantega made the predictions at a closed cabinet meeting and did not expand further. His presentation did not address Brazil’s growing current account deficit, expected to exceed 2 percent of GDP this year.
His prediction is far above that of the World Bank, who last week estimated Brazil would grow 3.6 percentin 2010.
But Mantega’s words were nevertheless conservative, given the Central Bank is predicting a 5.8 percent annual rise and some private sector analysts predictions it could go as high as 6.5 percent. In the past, the government’s estimate usually exceeds that of analysts.
“It really is a bit strange because Mantega’s estimates are usually towards the high end of the scale,” said Alessandra Ribeiro, an economist with the Tendências Consultoria Integrada firm. “I think he might be worried about inflation and interest rates.”
Although inflation has remained steady and is expected to end 2009 at just over 4 percent, officials are concerned growing domestic consumption could force it up. Interest rates, too, while lower than at any time in years, could be pushed higher from their current 8.75 percent.
Brazil’s economy, already the ninth biggest in the world, withstood much of the aftershocks caused by the economic crisis, with President Luiz Inácio Lula da Silva frequently boasting Brazil was the last in and first out of recession.
The country’s finances have remained solid, however, with the currency strong and foreign reserves at a record $241.4 billion.