The country has the longest growth cycle in 30 years
Valor Econômico 10/22/2007
Brazil has been growing for 22 consecutive quarters. Although not being very long, it is the longest growth cycle of the Gross Domestic Product (GDP), at least since the beginning of the 1980s. It is superior to the 15 quarters registered between 1984 and 1987, and the 12 quarters that happened from 1993 to 1995, leveraged by the Real Plan (Plano Real). For the time being, the cycle loses for the miracle of the 1970s, even though the country lacks one single series of GDP capable of looking at the quarterly evolution in lengthier periods. In addition to being long for Brazilian standards, the current cycle has another good aspect: It combines investment and consumption. Companies have been investing on the improvement of the productive capacity for 14 quarters and the concurrent increase of credit, income and employment has allowed the families to keep their consumption high for 15 quarters - in each case, in comparison with the same quarter of the previous year. It is this triple combination of high of the GDP, improvement of the productive capacity, and increase of the internal demand - supported by sound foreign accounts and inflation under control - that makes the analysts foresee that this cycle may be sustained for many more quarters, even though the rhythm of growth is below that achieved by other emerging countries, such as China and India.