GDP grows 7.5% and Brazil becomes 7th economy
Folha de S. Paulo
The GDP (Gross Domestic Product) of Brazil grew 7.5% in 2010, the highest rate since 1985, and led the economy of the country to the position of seventh largest economy in the world. Among the great rich and emerging nations, the Brazilian growth only last to the growth registered by China and India last year.
But that is a picture of the past: since the second half, the scenario presents a slowdown and some projections already indicate growth below 4% in 2011. Part of the growth of 2010 was due to the weak basis for comparison of 2009, when the GDP fell 0.6% because of the crisis. It will be difficult to expand the economy this year compared to the high growth of last year and in a scenario of tightening of monetary and fiscal policies to curb the rising inflation.
Because of that, analysts review the projections. LCA estimates growth of 3.6% and Tendências, 3.9%. The most regular market expectations indicated 4.5%. Should the projections be confirmed, the result of 2011 may stay a little below the average growth of the GDP in the eight years of the Lula Government: 4%. In the FHC period, the average rate stayed at 2.3%. In the data of the last quarter of 2010, the stepping on the brakes became clear in the industry, which fell 0.3% compared to the third quarter. The GDP, in that comparison, grew 0.7%, driven by the consumption of the families and its reflex in the services.
For Roberto Olinto, Coordinator of National Accounts of the IBGE (Brazilian Institute of Geography and Statistics), the growth of 2010 was dictated precisely by the expansion of credit (that the Central Bank now wants to stop), income and employment, even though he admits the great aid of a weak basis for comparison in 2009. Together, he says, they boosted consumption and investment. Until April 2010, according to him, the tax benefits for the purchase of vehicles and home appliances with reduced IPI (Excise Tax) also helped. Those factors, he says, explain the good performance, in 2010, of sectors such as construction (11.4%), financial mediation (11.4%) and retail (7.5%). Industry grew 10.1% principally because of the weaker basis of comparison of 2009, to the credit and to the measures of incentive of the beginning of the year. "Last year had good growth, but it is not compatible with the current growth potential of the Brazilian economy", says Zara.