Photo: Brazilian Gov't Says Country is Holding Up During Global Crisis
Brazil’s finance minister said Thursday that Latin America’s largest economy is holding up well amid the “worst year” of the global economic crisis and that its solid foundation will enable it to achieve growth of nearly 4 percent this year.
“In terms of seriousness, what’s happening in 2012 is worse than what happened in 2009,” Guido Mantega said during a meeting with government officials and private-sector representatives.
Mantega reiterated his criticism of the most highly developed countries for what he describes as their inadequate response to the global turmoil, which he acknowledged is “already contaminating” the main emerging economies.
“Now this situation is even affecting the most dynamic emerging economies like India and China,” Mantega said, although he insisted Brazil was resisting the impact of the global slowdown.
The minister said “there’s an annual acceleration (in Brazil) that can be seen in the growth of gross domestic product,” which he estimated expanded around 0.6 percent in the second quarter.
Mantega said the latest GDP figures, to be officially released Friday, will show the Brazilian economy could expand 4 percent this year, well above market forecasts of roughly 2 percent growth.
He said Brazil’s economy will pick up steam in the final two quarters thanks to government stimulus measures, including tax-cut extensions for automakers and other sectors.
The minister once again criticized private banks and said economic performance continues to be dragged down by interest rates, which remain high even though the Central Bank has lowered its benchmark Selic rate steadily since last August and cut it to 7.5 percent on Wednesday.
Mantega called the current level “historic” and “almost civilized,” recalling that the same rate stood at 12.5 percent a year ago.
Brazilian President Dilma Rousseff, for her part, said Thursday that in the coming weeks she will announce new measures to reduce electricity costs and an ambition concession plan for airports and ports, part of her administration’s bid to spur growth amid the global slowdown.
Other stimulus measures, including tax cuts for domestic industries hardest hit by the global crisis and a $65 billion concessions plan for roads and railways, were unveiled in recent weeks.