Brazil GDP trend still strong, says Mantega
Brazil’s finance minister launches spirited defense of economy following third quarter GDP slump, insisting rebound ahead
Brazil’s economy is set to return to growth in the
fourth quarter and continue that way in 2014, finance minister
Guido Mantega said on Tuesday.
||Brazilian finance minister Guido
His defense of the country’s growth trajectory
comes as the country reported a fall in output, of 50 basis
points, in the third quarter.
Mantega pointed to year on year growth of 2.2%. An upward
revision of second quarter growth figures made it harder for
the country to post growth in the third quarter, he added.
"The trend for Brazil’s economic indicators for
the fourth quarter point to higher growth rates than have been
seen for the third quarter," Mantega said Tuesday. "Consumption
is increasing and is expected to perform better than in Q3.
Industry will also show better results in the next quarter.
… Thus, Brazil’s growth rate for 2013 is
expected to remain within expectations by the market and many
Analysts at Capital Economics in London said Tuesday that
the numbers "dashed hopes" that Brazil’s economy
"After showing promising signs of rebalancing away from
consumption and towards investment in the first half of this
year, the expenditure breakdown revealed that the economy
returned to some old bad habits in the third quarter," they
Mantega refuted the claims in a discussion with reporters on
Tuesday. Investment had grown faster than consumption in the
past four quarters, compared to the previous period, he
"Investment in those quarters increased by 3.7%, while
family consumption increased by 2.8%," he said.
"This year we see investment is growing at a faster rate
than consumption. We have a scarcity of credit lines for
consumers. We have credit available for investors but not for
consumers. Consumers are being more moderate, and looking at
real estate, rather than durable goods.
"There’s a rebalancing happening in our economy
where investment is overtaking consumption as main driver for
The country was targeting a long term growth rate of 4%, and
investment in infrastructure — to pick up as more
concessions come online in 2014 — would help reach
this target, Mantega said. LF