In Brazil, “the confidence of the private sector remains stubbornly weak due to competitive challenges that have not been addressed,” said the IMF in its semiannual report.
Rio de JANEIRO The IMF again cut its forecast for Brazil’s economy, the world’s seventh, and now estimates will shrink by 1% this year, against the expansion of 0.3% to planned in January.
In Brazil, “the confidence of the private sector remains stubbornly weak due to competitive challenges that have not been addressed,” said the International Monetary Fund (IMF) in its biannual report on . global economic outlook, released Tuesday
In January, the IMF predicted that the Brazilian economy would grow 0.3% in 2015, and in October was even more optimistic anticipate an expansion of 1.4% this year <. / p>
The Central Bank of Brazil also forecast disappointing fifth year in 2015, but with a contraction of 0.5%, half of which predicts the Fund.
Other factors weighing are “the risk of electric water rationing and short-term consequences of research in Petrobras’ by corruption and” greater-than-expected fiscal tightening need to do, “he said.
A drought in the Southeast affected the water supply in late 2014 and early this year. There have been rationing and the government had to buy power from thermal power, which has become more expensive rates.
For Petrobras, which was the company pride of the country with 80,000 employees, was discovered a huge network of bribes that mobilized 4,000 million in a decade and particularly benefited leaders of the state, and the politicians of the ruling Workers Party and its allies legislators, prosecutors said.
More confidence, less consumption
“The renewed commitment of the Brazilian authorities to control the fiscal deficit and lower inflation will help restore confidence in the macroeconomic policy framework in Brazil, but further diminish the short-term demand “I expected the Fund.
The new Minister of Finance of Brazil, Joaquim Levy, is locked in a battle to carry out a fiscal adjustment to put its house in order.
Brazil projected tax savings goal of 1.2% of GDP by 2015, having failed to achieve last year, even after reducing it to 0.2 percent.
depues register a GDP increase of just 0.1 % in 2014, its fourth consecutive year of lean growth, Latin America’s largest economy accumulates a myriad of negative macroeconomic data.
The inflation is around 8.13% and far surpasses the center of the target 4.5% (the Central Bank estimated to be 7.9% in 2015), there is a high interest rate (12.75%) and current account deficit and trade balance.
Even unemployment, which showed resistant for months, this year the trend reversed and started to climb.
As in the rest of Latin America, which will grow an anemic 0.9% this year, as projected by the Background- Brazil’s economy first largest producer of several commodities, is also affected by the slowdown in the commodities markets.
The IMF expects further decline in commodity prices in 2015 were recorded in iron ore, which Brazil is one of the largest producers.
Improvements from 2016
By 2016, the IMF expects a slight improvement, up to 1% of Gross Domestic Product (GDP ). However, this figure is 0.5% lower than the predicted three months ago.
The IMF also expects inflation above the 6.5% maximum ceiling imposed by the government, but believes it will decrease by 2017.
“It is expected that inflation exceeds the tolerance ceiling this year, reflecting an adjustment of regulated prices and the depreciation of the exchange rate, and converge towards the goal of 4.5% over the next two years, “he said.
The real has depreciated more than 13% against the dollar so far this year.
The Fund also emphasizes the importance of large economies conducted significant to raise productivity and growth lasting structural reforms.
For Brazil, mostly recommended “educational reforms, labor laws and find markets for their products to increase competitiveness” .
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