Brazil's Mantega: Econ Growth Could Reach 6%-6.5% In 2010-2016
Brazil's economy has begun a new cycle of growth based on a robust domestic market that could reach rates of 6% to 6.5% over the coming six years, Brazilian Finance Minister Guido Mantega said Tuesday.
Speaking during a debate on future economic policy at the country's National Confederation of Industries, Mantega said Brazil emerged from a recent international financial crisis in good shape due to efforts to achieve accelerated growth in recent years.
"We were able to move quickly out of the latest crisis thanks to our previous robust growth cycle," he said. "We are already taking the first steps of a new cycle of expansion."
The minister noted that future growth would depend greatly on rates of investment, but said the prospects in coming years were good.
"To drive the new cycle we will depend fundamentally on the domestic market, but we'll also depend on investment," he said. "To give continuity, we have a large group of projects to stimulate investment, from energy, fuels, transportation and housing, to the World Cup soccer tournament and the Olympics."
Mantega said the government hoped to continue reducing local financing costs and offering more tax incentives to attract investment.
At the same time, however, he said that the government remained attentive to the effects of incoming foreign investment on the exchange rate.
"Some appreciation of the real is normal, but we need to avoid exaggeration," he said.
Brazil's currency, the real, has appreciated about 35% so far this year against the dollar under the effect of strong investment inflows.
Mantega said the recent imposition of a 2% tax on incoming portfolio investment has so far been efficacious.
"A month after introducing this measure, we can say that it has worked toward reducing volatility," he said. "We're not trying to impede appreciation, but eliminate excesses."
Mantega said the measure would help eliminate the risk of a bubble in local markets. However, he said the measure would not necessarily be made permanent.
By: Gerald Jeffris
Source: The Wall Street Journal
Brazil's economy has begun a new cycle of growth based on a robust domestic market that could reach rates of 6% to 6.5% over the coming six years, Brazilian Finance Minister Guido Mantega said Tuesday.
Speaking during a debate on future economic policy at the country's National Confederation of Industries, Mantega said Brazil emerged from a recent international financial crisis in good shape due to efforts to achieve accelerated growth in recent years.
"We were able to move quickly out of the latest crisis thanks to our previous robust growth cycle," he said. "We are already taking the first steps of a new cycle of expansion."
The minister noted that future growth would depend greatly on rates of investment, but said the prospects in coming years were good.
"To drive the new cycle we will depend fundamentally on the domestic market, but we'll also depend on investment," he said. "To give continuity, we have a large group of projects to stimulate investment, from energy, fuels, transportation and housing, to the World Cup soccer tournament and the Olympics."
Mantega said the government hoped to continue reducing local financing costs and offering more tax incentives to attract investment.
At the same time, however, he said that the government remained attentive to the effects of incoming foreign investment on the exchange rate.
"Some appreciation of the real is normal, but we need to avoid exaggeration," he said.
Brazil's currency, the real, has appreciated about 35% so far this year against the dollar under the effect of strong investment inflows.
Mantega said the recent imposition of a 2% tax on incoming portfolio investment has so far been efficacious.
"A month after introducing this measure, we can say that it has worked toward reducing volatility," he said. "We're not trying to impede appreciation, but eliminate excesses."
Mantega said the measure would help eliminate the risk of a bubble in local markets. However, he said the measure would not necessarily be made permanent.
By: Gerald Jeffris
Source: The Wall Street Journal
