High 2007 GDP already guarantees 2.5% growth for 2008
Folha de S. Paulo - 03/13/2008
The result of the GDP released by the IBGE (Brazilian Institute of Geography and Statistics) yesterday indicates the country may possibly grow more this year than what was foreseen. According to Octavio de Barros, Bradesco bank's director of the department of economic research and studies, in the next days he will review the scenario for this year and it is highly probable that he can make an adjustment upwards the projection, currently at 4.5%, due to a greater statistical transference from 2007 to 2008 than it was expected, 2,5%. It is worth reminding that this transference is only 2% below the median of the market projections of 4.5% for this year. According to Octavio de Barros, the domestic demand may not present any contribution for the growth of 2008 above that of 2007, which was 6.9% of the 5.4% of the GDP. On the other hand, the uncertainties in relation to the contribution of the external sector - that in 2007 was negative (-1.4%) - are significant. There is a tendency for this number to be even more negative in 2008 due to the combination of strong domestic growth with deceleration of the international growth. Octavio de Barros draws the attention to the unfolding of the international turbulences if there is a depreciation of the Real as result of an eventual strong fall in the prices of the commodities. In this case, BC (Central Bank) would have to increase the interest rates. In relation to the investments perspectives for 2008 they continue very favorable, both for the apparent consumption of machinery and equipment and for the civil construction. "Favoring both, we have greater economic growth", says Octavio de Barros. At the same time, the economist says he believes that, despite the risks, inflation may continue under control. It is not possible, though, to minimize the impacts of the expansion of productive credit, including the BNDES', and a greater corporate confidence.