Photo: Brazilian economy
Brazil’s finance minister said Wednesday the global economy has begun to recover and that will give the South American country a boost and enable it to continue to grow at a modest clip.
Nevertheless, Guido Mantega said he foresees a “painful transition” for the world economy following “capitalism’s biggest crisis in years.”
Mantega said during an appearance before a congressional committee that “the good news” is that the world is emerging from the slump, although he added that the “recovery will not occur from one moment to the next.”
He said he expects Brazil to grow at around 2.3 percent in 2013 - roughly the same rate as last year - with controlled inflation, adding that the country is experiencing a gradual improvement “consistent with the recovery of the global economy.”
While acknowledging that Brazil’s economy has expanded slowly in recent years, he said that same phenomenon was being seen “worldwide.”
He cited the case of the United States, which last year posted “modest growth of 1.9 percent,” and the slowdown of the Chinese economy.
“Not to mention Europe,” which as a whole contracted once again in 2013, Mantega said.
The finance minister said Brazil and other emerging economies have shown signs of strength since the United States began reducing financial-market stimulus measures.
“They said emerging countries were fragile,” Mantega said, adding that those nations have shown indications they remain “strong” even with the U.S. Federal Reserve’s phasing out of financial-asset purchases.
Citing Brazil as an example, he said the real has been among the currencies that have appreciated the most relative to the dollar in recent months.
Mantega also predicted that emerging economies will continue to be among the world’s most dynamic.
He said the South American giant remains one of the main destinations for foreign direct investment, saying he expects average annual inflows of some $60 billion - the FDI level since 2011 - to continue in the coming years.