Read about Brazil’s economy today, and most coverage focuses on how things have slowed down from the highs of the last ten years. GDP growth was 0.9 percent in 2012, after growing as much as 7.5 percent in 2010, and the IMF recently reduced 2013 projections from 3.5 to 3 percent. Inflation hit levels in April above the government’s upper limit of its target.
But the country’s central bank president, Alexandre Tombini, sees reasons for optimism. As external factors like the European fiscal crisis continue to have an effect on Brazil’s economy, he has highlighted an effort to limit the impact of those factors and increase investment in the country. Tombini recently told us (in the above video):
As far as geographic diversification, Brazil is well placed, but the problem is that the whole global trade has been affected by the U.S. and then the European situation the last five years. We hope global trade resumes growth in the coming years, so this will benefit a country like Brazil.
He also told us how, despite some of the recent challenges, Brazil’s potential for growth is still strong. 40 million Brazilians have emerged to be part of a new middle class over the last ten years, providing a sizable expansion of the country’s domestic markets, he says.
In a report this week, The Economist highlighted a similar point about the prospects for Brazil’s economy, describing that despite the slowed growth overall, Brazilians are seeing a better situation for themselves:
Yet Brazilians seem blissfully unconcerned. IPEA, a Brazilian research institute, regularly finds that two-thirds to three-quarters of families say their financial situation improved during the past year, and that they expect it to get even better in the year ahead. In December Gallup, a global pollster, found that those optimistic about the economy outnumbered pessimists by a wider margin in Brazil than in any other large economy.
Tombini also told us about how Brazil has been in a better position to navigate global economic uncertainty because of the strength of the country’s commodities sector. Watch our edited conversation in the video above.
Edemir Pinto on Brazil’s Financial Marketplace