IMF forecast is pessimistic, says Mantega.
"The projection seems pessimistic on the part of the fund. We had a weaker first half of the year, but we are observing a recovery in the Brazilian economy in the second half. From July onwards, we have a moderate acceleration of growth," declared the Minister of Finance; the IMF estimated growth of 0,3% for Brazil in 2014; according to Guido Mantega, the estimates were influenced by the low growth of the world economy.
Wellton Max - Reporter from Agência Brasil
Finance Minister Guido Mantega considered the 0,3% growth forecast for the Brazilian economy this year, released today (7) by the International Monetary Fund (IMF), to be pessimistic. According to him, the recovery of economic activity in the second half of the year will lead the country to end 2014 with higher growth.
According to the minister, the IMF's estimates were influenced by the low growth of the global economy, marked by the slow recovery in the United States and the continued low growth in Europe. He also believes that the weak performance of the economy in the first half of the year interfered with the projection.
"The projection seems pessimistic on the part of the fund. We had a weaker first half of the year, but we are observing a recovery in the Brazilian economy in the second half. From July onwards, we have a moderate acceleration of growth," declared Mantega.
Officially, the Brazilian government forecasts that the Gross Domestic Product (GDP, the sum of the wealth produced in the country) will grow by 0,9% in 2014. According to Mantega, this projection will remain in place until the end of November, when the Ministry of Planning will release the new version of the Report on Primary Revenues and Expenditures, a document with estimates on the federal budget.
The minister presented several indicators showing the recovery of production and consumption in the second half of the year. According to him, vehicle sales jumped 13,7% in September, and supermarket sales increased 2,53% above inflation in August.
According to Mantega, another factor that contributed to the low growth in the first half of the year was the Central Bank's interest rate hikes to control inflation. Mantega stated that the stabilization of price indices allowed the monetary authority to announce measures that will increase the volume of credit, such as reducing reserve requirements and improving regulation.
"We have several indicators that credit is returning with the reduction of reserve requirements and the increase in the term of payroll-deducted loans. Credit is returning rapidly, which will lead to moderate economic growth by the end of the year," he said.
Highlighting the stagnation of the global economy, the minister attributed greater weight in the IMF's forecasts to the international economic scenario than to internal factors. "Of the advanced economies, only the United States and the United Kingdom are growing. Japan has stopped growing, Germany is having difficulties. Some people want to attribute these phenomena to Brazilian problems, but they are global problems," he argued.
According to the minister, the government will hand over the economy at the end of the year in a solid situation, with low external debt, high international reserves, and unemployment at minimum levels. "Unlike other countries, we have healthy economic parameters. The employment level is high, the consumer market is intact, and the wage bill is growing. This is a privilege for Brazil while many countries face unemployment and falling wages," he countered.