Super-January may speed 2008 GPD
Valor Econômico - 03/11/2008
The surprising result of the industrial production of January and the increase of sales in the retail market are leading the professional associations, banks and consulting companies to review the upwards projections for the 2008 Brazilian economy growth. In the evaluation of RC Consultores, BNDES and National Confederation of Commerce (CNC), the economic activity is showing it has grounds to grow above 5.2% to 5.3% foreseen for the Gross Domestic Product (GDP) of 2007, whose official data will be released by the IBGE this Wednesday. Fábio Silveira, partner of RC Consultoria, outlines a fairly heated economy in the first half of the year. "2008's first indexes, with the industry growing 8.5% and the commerce speeding at 9%, plus the high price of the commodities, are pointing to a very comfortable situation". Carlos Thadeu de Freitas, chief-economist of the National Confederation of Commerce (CNC), calculates that if the 2007 GDP grows more than 5%, as the government is imagining, it is already showing more than 2% of growth for 2008. "Together with the expansion of the industry we are calculating it is possible that the GDP for 2008 grows closer to the level of 5%. Our maximum was 4.5%". Freitas bets on the increase of the investments and on the vigor of the industry to continue speeding the economy in these first six months. He foretells, however, that the future interest, which started going up again last week after the "daring" notice from Copom (Monetary Policy Committee) informing that "it is attentively monitoring the conjuncture", may lead to some deceleration in the second half of the year, with more expensive credit and investment. "Nonetheless, nothing capable of making the country grow less than 4.5%". Fernando Puga, advisor of the presidency of BNDES, confirms the expectation of the bank for an expansion rate of 5.5% for the economy this year. "We are already starting ahead", he said. He explains the BNDES projection was made with grounds on the mapping of the investment projects of the bank's portfolio, which works as a previous index of the level of activity. "The mapped sectors are responsible for 50% of the investment considered Gross Fixed Capital Formation (GFCF) in the economy". The approvals of projects in the bank, one stage prior to the outlay, amounted to R$ 98 billion (US$ 55.7 billion) in 2007, from which R$ 19 billion (US$ 10.8 billion) to electric energy projects, and R$ 18 billion (US$ 10.2 billion) to transportation, including roads and railroads. "We are sure we will release from R$ 80 billion (US$ 45.5 billion) to R$ 85 billion (US$ 48.3 billion) or more, to finance, to a great extent, the construction of new industrial plants and infrastructure works". Puga informed that BNDES works with a growth rate between 6% and 7% for the extractive and processing industry this year.