Brazilian Finance Minister Expects Economy to Recover in Second Semester

10/08/2014 - 08h52

According to Brazil's finance minister Guido Mantega, the IMF's new economic forecasts are "pessimistic".

According to Mantega, while the growth of the Brazilian economy has been poor for the first half of this year, with two quarterly decreases in activity, the second semester will be better.

"In the first semester, we had various internal and, particularly, external problems," he said. "But in the second semester we have been seeing a recovery. There are various indicators showing moderate acceleration of growth after July."

Among the internal factors Mantega cited as reasons for the economy's lukewarm performance were the drought and the increase of interest rates by the Central Bank. Without these, "we would be growing more," he said.

While the IMF has predicted just 0.3% economic growth for the year, the government is still aiming for 0.9%.

In November, after the elections, the government will have the opportunity to revise its prediction, in the year's final revenue and expenses report.

The IMF blames low levels of productive investment, reduced consumption and low confidence on the part of consumers and the business community as reasons for the poor performance of the Brazilian economy.

Mantega says measures are already being taken to increase investment.

The confidence of consumers and business leaders should return when trade reaches a "more accelerated level", which Mantega believes will occur in the last trimester, with increased sales at the end of the year, measures to stimulate credit and the 13th salary.

Mantega argues that the global economy has not recovered at the expected rate, particularly that of Europe, which leaves Brazil "with only one leg to stand on".

"It means we will have to make a bigger effort, so we can improve our own conditions," he said.

The minister did not attend the IMF meeting in the United States this week, owing to the second round of the presidential elections. "We all need to be here in Brazil," he said.

The president of the Central Bank, Alexandre Tombini, who is to lead the Brazilian delegation, has reduced his travel itinerary by half. Initially, an advisor said he would spend five days in Washington.

Now, he is due to spend just two days there: Friday (10) and Saturday (11) this week.

Translated by TOM GATEHOUSE

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	Sergio Lima/Folhapress
	According to Brazil's finance minister Guido Mantega, the IMF's new economic forecasts are "pessimistic"