Brazil:Sustainable    Growth    Min. Guido Mantega              April 2010
2 Brazil: one of the fastest growing economies in 2010 GDP growth forecast – selected countries – in % of GDP* The Economi...
3New social and economic paradigms• Emphasis on a more robust growth• Employment generation• Social inclusion and income d...
4 Robust employment generation and more formal jobs Net employment generation – in thousands of workers* Government foreca...
2010: the smallest unemployment rate in a time seriesUnemployment rate – in % of economically active population           ...
New middle class and Brazilian unificationSocial class distribution - in % of population                                  ...
Social classes diversify consumption% change in the purchased value (food, beverages, hygiene and cleaning)* Average month...
8   Highest employment rate in the world   Net employment generation forecast for Q2 2010*   Gap within companies that exp...
9Purchasing power of minimum wageToday’s minimum wage buys more products – in numbers of staple food baskets              ...
10Dinamycs of Brazilian domestic demandRetail sales – selected countries - % change from 2008 to 2009                     ...
11Retail Sales - PMC% change from preceding every 12-month period* Including automobiles, motorcycles, parts and pieces, a...
12Government action is essential• Infrastructure stimulus: PAC• PAC is a strategic investment program with  management and...
13     Investment enhancement      % change from preceding year     * Ministry of Finance Forecasts                      S...
14     Federal Government and State-Owned Companies     Investment      Cash basis - % of GDP     * Ministry of Finance Fo...
15     Industry investment volume     Industry resource distribution - realized and planned by sector of activity         ...
Decade of infrastructure to come     Investments in R$ billions                                  Source: Exame Infrastruct...
17Construction growth in BrazilAverage number of contracts by presidential terms                                          ...
182010: Sustainable and quality growth• Growth is sustainable because it doesn’t  create macroeconomic imbalances• Inflati...
19Evolution of inflation index, target and expectations%% change from every 12-month period* Market Forecasts FOCUS Report...
Decomposition of Monthly Inflation (% change) 0.9                Remaining itens                Fuel (ethanol and gasoline...
21Sustainable PAC: reduction of public debtFiscal results – primary surplus and nominal deficit/surplus - in % of GDP     ...
-                                                                             10,0                                        ...
23  Sustainable nominal deficit: reduction of public debt  Nominal deficit - in % of GDP* Ministry of Finance Forecasts in...
24Sustainable PAC: reduction in public debtPublic Sector Net Public Debt - in % of GDP* Ministry of Finance Forecasts in F...
0                5                            10                                               15                         ...
26     Deficit in Current Account does not bind growth, nor increase     external vulnerability     Current Account – in U...
27Lower external vulnerabilityInternational reserves and external debt - in % of GDP and index                            ...
28From supporting to leading country• Brazil is respected and highly regarded.• Change: from debtor to creditor and new  p...
Brazil Ministry of Finance - Presentation
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Brazil Ministry of Finance - Presentation

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Good report about Brazil in 2010.

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Brazil Ministry of Finance - Presentation

  1. 1. Brazil:Sustainable Growth Min. Guido Mantega April 2010
  2. 2. 2 Brazil: one of the fastest growing economies in 2010 GDP growth forecast – selected countries – in % of GDP* The Economist forecast Source: The Economist** Government forecast Produced by: Ministry of Finance
  3. 3. 3New social and economic paradigms• Emphasis on a more robust growth• Employment generation• Social inclusion and income distribution• Investment enhancement• Government encourages and promotes growth• Efficient stimulus programs
  4. 4. 4 Robust employment generation and more formal jobs Net employment generation – in thousands of workers* Government forecast of 1.8 million for 2010, of which 657,259 Source: CAGED /MTEcomprised within the accumulated year period up to Mar-2010 Produced by: Ministry of Finance
  5. 5. 2010: the smallest unemployment rate in a time seriesUnemployment rate – in % of economically active population Source: PME/IBGE Produced by: Ministry of Finance
  6. 6. New middle class and Brazilian unificationSocial class distribution - in % of population Source: MDS, MTE and CPS/FGV Produced by: Ministry of Finance
  7. 7. Social classes diversify consumption% change in the purchased value (food, beverages, hygiene and cleaning)* Average monthly household income is specified below * Class D/E: from R$ 0 to R$ 1,115 Class C: from R$ 1,115 to R$ 4,807 Source: Kantar World Panel Class A/B: from R$ 4,807 and on Produced by: Ministry of Finance
  8. 8. 8 Highest employment rate in the world Net employment generation forecast for Q2 2010* Gap within companies that expect job raising (43%) as opposed to the ones which expect a reduction (5%) in Q2 2010 (% between Q1:2010 and Q4:2009) * Expected employment generation from Manpower Consulting research Source: Manpower Consulting8for the Q2 2010 based on interviews with 850 companies in Brazil Produced by: Ministry of Finance
  9. 9. 9Purchasing power of minimum wageToday’s minimum wage buys more products – in numbers of staple food baskets Source: DIEESE Produced by: Ministry of Finance
  10. 10. 10Dinamycs of Brazilian domestic demandRetail sales – selected countries - % change from 2008 to 2009 Fontes: IDV Produced by: Ministry of Finance
  11. 11. 11Retail Sales - PMC% change from preceding every 12-month period* Including automobiles, motorcycles, parts and pieces, and Source: IBGEconstruction materials Produced by: Ministry of Finance
  12. 12. 12Government action is essential• Infrastructure stimulus: PAC• PAC is a strategic investment program with management and infrastructure planned actions• Industrial sector policy• Income distribution• Acting and efficient State-owned companies (BNDES, BB, CAIXA, BNB, Petrobras)
  13. 13. 13 Investment enhancement % change from preceding year * Ministry of Finance Forecasts Source: IBGE13 Produced by: Ministry of Finance
  14. 14. 14 Federal Government and State-Owned Companies Investment Cash basis - % of GDP * Ministry of Finance Forecasts Source: Ministry of Finance14 Produced by: Ministry of Finance
  15. 15. 15 Industry investment volume Industry resource distribution - realized and planned by sector of activity Source: BNDES15 Produced by: Ministry of Finance
  16. 16. Decade of infrastructure to come Investments in R$ billions Source: Exame Infrastructure Yearbook 2009-201016 Produced by: Ministry of Finance
  17. 17. 17Construction growth in BrazilAverage number of contracts by presidential terms Source: Abecip and CAIXA Produced by: Ministry of Finance
  18. 18. 182010: Sustainable and quality growth• Growth is sustainable because it doesn’t create macroeconomic imbalances• Inflation under control – efficient inflation targeting regime• Robust fiscal rules – primary surplus target of 3.3 % of GDP in 2010 and continuous reduction in net public debt• Low external vulnerability
  19. 19. 19Evolution of inflation index, target and expectations%% change from every 12-month period* Market Forecasts FOCUS Report from April 9th, 2010 Fontes: IBGE and Brazilian Central Bank Produced by: Ministry of Finance
  20. 20. Decomposition of Monthly Inflation (% change) 0.9 Remaining itens Fuel (ethanol and gasolines) 0.8 0.7 Tranport (tickets and fares) Food (in house) 0.6 0.5 0.4 0.3 0.2 0.1 0.0 -0.1 -0.2 20Source: IBGE.20 Elaborated by: MF/SPE
  21. 21. 21Sustainable PAC: reduction of public debtFiscal results – primary surplus and nominal deficit/surplus - in % of GDP *** Ministry of Finance Forecasts Source: Brazilian Central Bank and The Economist Produced by: Ministry of Finance
  22. 22. - 10,0 15,0 20,0 25,0 5,0 (5,0) jan/03 abr/03 jul/03 out/03 jan/04 abr/04 jul/04 out/04 GDP jan/05 abr/05 jul/05 out/05 jan/06 Primary expenditure Net primary revenue abr/06 jul/06 out/06 jan/07 abr/07 jul/07 out/07 jan/08 abr/08 jul/0822 out/08 jan/09 abr/09 jul/09 Nominal Growth rate (% YOY) out/09 jan/10 abr/10
  23. 23. 23 Sustainable nominal deficit: reduction of public debt Nominal deficit - in % of GDP* Ministry of Finance Forecasts in February, 2010 Source: The Economist** G-20 nominal deficit average refers to Apr 15th, 2010 ed. Produced by: Ministry of Finance
  24. 24. 24Sustainable PAC: reduction in public debtPublic Sector Net Public Debt - in % of GDP* Ministry of Finance Forecasts in February, 2010 Source: Brazilian Central Bank Produced by: Ministry of Finance
  25. 25. 0 5 10 15 20 25 30 35 40 38 Brazil 37South Korea 35 Philippines Indonesia 34 34 Mexico Turkey 33 32 Peru 31South Africa Transparency 30 Chile 29 Hungary 24 Poland Paquistan 21 21 Thailand 20 Lebanon 18 Bulgaria Colombia 16 16 Romania 12 Malaysia Costa Rica Croatia Egypt 11 11 11 11 Ukraine Uruguay 10 10 Venezuela 9 Vietnam 6 Belize 6 Tunisia 4 Ecuador 4 Russia 3 China IIF Ranking on Investors Relation and Data 3 Morocco 2 Dominican… 25
  26. 26. 26 Deficit in Current Account does not bind growth, nor increase external vulnerability Current Account – in US$ billions and % do PIB * Government Forecasts Source: Brazilian Central Bank26 Produced by: Ministry of Finance
  27. 27. 27Lower external vulnerabilityInternational reserves and external debt - in % of GDP and index Source: Brazilian Central Bank Produced by: Ministry of Finance
  28. 28. 28From supporting to leading country• Brazil is respected and highly regarded.• Change: from debtor to creditor and new protagonist position.• The myth that “Brazil is a second-class country” has fallen apart.• Brazil could became one of the most dynamic countries in this decade.

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