12/13/2007 10h47

Internal demand is the strongest in 12 years

Valor Econômico - 12/13/2007

With the strong growth of the Gross Domestic Product (GDP) in the third quarter, the bets on an expansion of at least 5% for the Brazilian economy in 2007 have been consolidated once and for all. The great prominence goes to the domestic demand: it contributed with 6.8 percentage points for the expansion of 5.2% registered by the GDP in the four quarters ended in September, in comparison with the four previous quarters, according to the calculations from Rosenberg & Associados. That is the highest level since the 7.3 points seen in the fourth quarter of 1995, when Brazil still lived the euphoria of the stabilization brought by the Plano Real. The most optimistic estimates point to an advance around 5.5% for the GDP for 2007. The consumption of the families and the investments in civil construction and in machinery and equipment (the Gross Fixed Capital Formation, GFCF) are the main engines of the growth, responding to the scenario formed by falling interests, employment and income increase, abundant credit offer and inflation under control. In the third quarter, the GDP grew 1.7% compared to the second quarter, in the series free of seasonal influences. This strong figure, equivalent to 7% in annualized terms, was one of the reasons that have led analysts to believe that the GDP may grow above 5% in 2007. The other is that the IBGE reviewed the growth registered in the first semester. The expansion of the first quarter of 2007 in relation to the fourth quarter of 2006 went from 0.9% to 1.1%, whereas the expansion of the second quarter of this year in comparison with the first was reviewed from 0.8% to 1.3%.