Transcript Source
Brazilian Economic Outlook for 2011 Minister of Finance Guido Mantega 2011 Brazil Summit New York, April 18, 2011 2 • • • • The world economic recovery slowly continues World divided between: • Slow growth, high unemployment and big fiscal deficits in advanced countries • Fast growth, strong job creation and inflation in emerging markets Advanced countries have not recovered from crisis yet. Good news: Brazil belongs to the second group (countries with high growth and employment rates). 3 New global economic scenario after 2008 crisis GDP annual average growth, in % YoY Source: IMF Produced by: Ministry of Finance 4 2011: various recovery paces GDP forecasts, in % YoY Source: The Economist Produced by: Ministry of Finance 5 Brazil: Sustainable Growth Strong domestic market Increasing investment rate Adjustments for post-crisis period: Economic growth slowdown Inflation control Fiscal results strengthening No macroeconomic imbalances 6 GDP growth led by domestic demand In %, YoY * Ministry of Finance forecasts Source: IBGE Produced by: Ministry of Finance 7 Investments reached record levels in 2010 In % YoY Source: IBGE Produced by: Ministry of Finance 8 Brazilian investment plan – PAC 1 improved GDP growth In US$ billion * PAC – Growth Acceleration Program Source: Ministry of Planning, Budget and Management Produced by: Ministry of Finance 9 Brazilian investment plan – PAC 2 supports future growth In US$ billion * PAC – Growth Acceleration Program Source: Ministry of Planning, Budget and Management Produced by: Ministry of Finance 10 Brazilian investment growth rate above other EMs In % GDP (Investment rate: 48,1% of GDP) Source: IMF and Crédit Suisse Produced by: Ministry of Finance 11 Brazil: outstanding results for the non-financial sector 168 non-financial companies balance, in US$ billions Source: Economatica Financial Consulting Produced by: Ministry of Finance 12 Banking sector growing fast in BRICS Assets of major 5 domestic banks, by country, in US$ trillions Source: Bankscope, in: IIF Capital Markets Monitor, January 2011 Produced by: Ministry of Finance 13 Brazilian stock market widens Brazilian stock market trade, in R$ billion * Accumulated in 12 months, by March 2011 Source: BM&F Bovespa Produced by: Ministry of Finance 14 Brazilian economy has been adjusted to the 2011 scenario Maintenance of countercyclical policy in a context of economic recovery Reversal of 2009-2010 economic stimulus R$ 50 billion cut in public spending Spending efficiency Minimum wage at R$ 545 Ensuring fiscal soundness Ensuring inflation control 15 Robust primary surplus reduces nominal deficit In % of GDP * Ministry of Finance forecasts Source: Brazilian Central Bank Produced by: Ministry of Finance 16 Public Sector primary result In % GDP, accumulated in 12 months Source: National Treasury Produced by: Ministry of Finance 17 Job formalization reduces social security deficit Social security annual deficit, in % of GDP, accumulated in 12 months Source: Ministry of Finance Produced by: Ministry of Finance 18 Payroll remains stable compared to GDP In % of GDP * Ministry of Finance forecasts Source: Ministry of Finance Produced by: Ministry of Finance 19 Sound fiscal situation compared to other countries Budget balance forecasts for 2011, in % GDP Source: The Economist Produced by: Ministry of Finance 20 Inflation: a global issue Inflation forecasts for 2011, in % YoY Source: The Economist and Brazilian Central Bank Produced by: Ministry of Finance 21 Commodity-Price index- CRB Commodity-price index, 1967=100 * In March 31st, 2011 Source: Thomson Reuters Produced by: Ministry of Finance 22 Oil price historic highs In US$, nominal price per barrel (Brent), average monthly and deflated by the U.S.A inflation. Source: Bloomberg Produced by: Ministry of Finance 23 Measures to moderate growth and contain inflation Commodity inflation: depends on international markets Stimulus to increase the supply of commodities Government measures and objectives: • Stimulus to agricultural supply increase • Compulsory requirements increase • Brazilian Central Bank’s macroprudential measures • SELIC interest rate rise • Reduction of activity level and public expenditure • 1.5% IOF tax increase in credit operations for households 24 Inflation within the bounds set by the targeting regime. Consumer Price Index (IPCA), in % YoY *Brazilian Central Bank forecasts Source: IBGE and Brazilian Central Bank Produced by: Ministry of Finance 25 Inflation under control In % change from preceding month Source: IBGE Produced by: Ministry of Finance 26 Public transportation and fuels pressurized prices in March In % change from preceding month Source: IBGE Produced by: Ministry of Finance 27 Foreign Exchange Market In US$ million * In April 1st, 2011. Source: Brazilian Central Bank Produced by: Ministry of Finance 28 Brazilian Real appreciation in relation to selected currencies Index (January 2005 = 100), exchange rate deflated by inflation differentials * Position for real changes in February, 2010 Source: FED St. Louis and Brazilian Central Bank Produced by: Ministry of Finance 29 Brazilian Real appreciation in relation to selected currencies Index (January 2009 = 100), exchange rate deflated by inflation differentials * Position for real changes in February, 2010 Source: FED St. Louis and Brazilian Central Bank Produced by: Ministry of Finance 30 Brazilian Real appreciation in relation to selected currencies Index (May 2010 = 100), exchange rate deflated by inflation differentials Source: FED St. Louis and Brazilian Central Bank Produced by: Ministry of Finance