01/07/2008 14h41

Public investment to double this year, says Ipea

Valor Econômico – 01/07/2008

Investment will continue being the main engine for the growth of the Brazilian economy this year. In the economists' opinion, the Gross Fixed-Capital Formation (GFCF), equation used to measure the behavior of investments, tends to keep the strong rhythm of expansion seen last year, when it grew between 12.3% and 12.5%. As for the investment rate, which measures the participation of the inversions in Gross Domestic Product (GDP), it got close to 18%, according to projections of the research institutes and consulting companies heard by Valor. Marcos Felipe Casarin, economist of the Conjuncture Group of the Department of Economics of the Federal University of Rio de Janeiro (UFRJ), foresees a growth of 11% for the GFCF this year. The Institute for Applied Economics Research (Ipea) works with 12%. If any of these results are confirmed, the upward trajectory of investments of the last four years, at rates above 10%, will be consolidated, well above the GDP. This way a sustainable scenario for the economic activity of the country is guaranteed for the next years.  The increase of the level of investment in 2008 may start to favorably impact the Level of Use of the Installed Capacity (Nuci) of the country, currently almost at the limit (82% on the average, according to National Confederation of the Industry). Casarin foresees that the installed capacity may withdraw, as the investments contracted in 2007 become an expansion of the production on the part of the companies, assuring the increase of the offer of goods in the economy, in other words, growth of the GDP. And, consequently, ruling out the threat of demand inflation.