Economia

Guido Mantega’s broken record Mar 1, 2013 3:40pm by Jonathan Wheatley

Brazil will grow by 3 to 4 per cent in 2013! And that’s on the authority of Guido Mantega, finance minister, aka Guido the Forecaster, so it must be true. It’s understandable that Mantega would want to put a brave face on things after the IBGE, Brazil’s statistics agency, published another set of disappointing growth figures on Friday. But with GDP growing just 0.9 per cent in 2012 – rather less than Mantega’s initial and persistent projections of 3 to 4 per cent – his relentless optimism is doing nothing for the government’s credibility. Last year’s anaemic growth – down from an already-disappointing 2.7 per cent in 2011 – was roughly in line with analysts’ expectations, although the economy’s performance in the fourth quarter, when it grew by just 0.6 per cent compared with the third, was slightly less than the 0.7 per cent projected by a Reuters poll. Of greater concern will be the reported fall in savings and investment. Savings were equal to just 14.8 per cent of GDP in 2012, down from 17.2 per cent in 2011. Investment was equal to 18.1 per cent of GDP, the IBGE said, down from 19.3 per cent. Brazil has launched a series of initiatives to get investment going again, all to little avail. What’s more, the fall in investment will confirm what many have long feared: that faced with the need to cut public spending to (more or less) balance its books, the government has trimmed investment rather than facing the more politically fraught challenge of cutting current expenditure on public sector wages and the like. None of that, however, will wipe the smile off Mantega’s face.