Country may keep 5%-growth until 2012, economists evaluate
Valor Econômico - 12/11/2007
The country has macroeconomic conditions to keep its growth rhythm around 5% until 2012, if the current conditions of increase in the production and demand are maintained and investments in sector of capital goods are consolidated. That is the conclusion of the economists who took part, yesterday, in the workshop sponsored by the College of Economy, Administration and Accounting (FEA) of the São Paulo University (USP). Régis Bonelli, a researcher from Casa das Garças and the Instituto de Estudos do Trabalho e Sociedade - IETS (Institute for the Studies related to Work and the Society),foresees an increasing expansion of productivity until 2012, going from 1.8% in 2007, to 1.83% in 2008, reaching 2.4% in 2012. The reasons are the consolidation of the investments in capital (that increased 10% this year) and the increase of the employment level (which grew 2.04% in the year). He also estimates the growth of investment in savings that currently represents 17.6% of the GDP, to 22.5 in five years. These associated factors will lead the GDP to a growth of 5.2% this year and 4.7% in 2008, and it may reach 5.48% until 2012. The improvement of the efficiency of the public sector was also pointed out by Carlos Antonio Luque, professor at the FEA, as a challenge to growth in the next years. He remarked that the government uses, on an average, 1.9% of its tax revenues in infrastructure investments every year. In the decade of the 1990's, this rate was around 20%. On his turn, economist Fabio Kanczuk, also a professor at the FEA, what the country lacks is the increase of productivity. According to him, the cost of capital is high due to the tax burden, which currently corresponds to 35% of the value of the GDP. He foresees an economic growth between 3.7% and 5% a year in the country in the mid run, but he fears that a reversion in the balance of the current transactions may lead to currency devaluation and subsequent increase of inflation, leading to a cycle of reduction of economic growth.