Investment grows more and gives quality to 1Q GDP
Valor Econômico
The investment started again to drive the economic activity in the first quarter, reversing the less healthy composition registered in the previous quarter, when the consumption of the families had grown at a rate much greater than the Gross Fixed Capital Formation (GFCF). Six of the nine analysts consulted by Valor bet in a stronger growth of the investment, supported by the explosive growth of household consumption of machinery and equipment and in a somehow more moderate growth of construction.
The most positive projections indicate growth from 3.5% to 4% in the first quarter for the investment compared to the previous quarter, after the seasonal adjustment, a much stronger pace than the 0.7% of the fourth quarter of 2010 compared to the third, in the same series. There are, however, more cautious estimates, indicating an increase of the gross formation below 1%. Reduction of the credit for the companies and the reduction in the public investments are the arguments of the economists who do not expect an expressive growth in the first quarter.
For the household consumption, the projections range between 0.4% and 2%. In the calculations of the result of the group of the GDP in the first quarter, however, there is less divergence, and the general expectation is an acceleration compared to the 0.7% of the fourth quarter on the third (with the adjustment), with estimates ranging between 1% and 1.5%. The official numbers will be announced by the IBGE (Brazilian Institute of Geography and Statistics) on June 3.
The head economist of MB Associados, Sérgio Vale, is one of those who estimate a very expressive increase in the investment in the first quarter, betting on a 3.5% growth compared to the prior quarter after the seasonal adjustment. The strong number is due, mainly, to the growth of 7.2% in the apparent consumption of machinery and equipment (the sum of the production and imports, less the export of those products), he says, projecting a 2.1% growth for construction. The opportunity of buying a less expensive machine abroad, due to the increase in the price of the Real, is also highlighted in the analysis of the Brazilian Institute of Economics (Ibre) of the Getulio Vargas Foundation, which expects an investment 2.7% stronger in the first quarter compared to the end of 2010, in the series with the adjustment.
Even though he expects strong investment growth, the Coordinator of the Macro Bulletin of the Ibre, Regis Bonelli, highlights the volatile nature of the gross fixed capital formation, which fluctuates considerably. The estimates of the Ibre, in the first quarter, the household consumption will grow 1.4% (nearly 50% below the investment), a loss of vigor influenced by the stronger basis of comparison of the fourth quarter and by the reduction of the pace of the sales of cars, says Bonelli. An investment that grows more than the consumption gives more quality to the growth, since it points to the increase of the productive capacity of the economy. The matter, says Bonelli, is that, before increasing the offer, the investment fuels the demand, which is already heated, in a scenario of inflation under pressure.
Bradesco also expects growth of 3.5% for the investment in the first quarter, attributing to the force of GFCF a possible anticipation of projects. The Head Economist of HSBC, André Loes, calculates the growth of the investments in the first quarter, compared to the same period in 2010, achieved vigorous 15.7%. The result is even more expressive, evaluates Loes, "if we take into account that the first quarter of last year was very strong in investments, due to the tax cuts for the industry and the environment of enthusiasm in the country". In the same comparison, HSBC estimates at 5.8% the growth of the household consumption. Loes made one of the most optimistic estimates on the growth of the GDP in the first quarter this year, of 1.5% compared to the fourth, with the seasonal adjustment. In the year, HSBC projects an increase of 4.7% in the GDP, with the household consumption growing one percentage point above the GDP, and the investments, 11%.
In the group of the pessimists with the investment, Alessandra Ribeiro, of Tendências Consultoria, projects growth of 0.8% in the first quarter, below the 1% expected for the household consumption. In the calculations of the consulting firm, construction grew 1.4%, consumption of capital goods, 4.5%, but the stock of credit to the companies, which it includes in the model, fell 0.3%, always in the series with seasonal adjustment. Besides those mentioned, Valor consulted Santander - which estimates at 0.4% the increase in the investments and at 1.2% that of household consumption - and LCA Consultores.