Brazil announced Thursday it has become the world’s seventh economy after having expanded 7.5% in 2010, the strongest in 24 years. Brazil’s GDP now stands at 2.1 trillion US dollars with a per capita income of 11.185 USD.
“If we consider prices and purchasing power, a pending homework from the World Bank and the IMF, Brazil’s GDP is 3.6 trillion USD which places us in fifth place ahead of France and the UK”, said Finance minister Guido Mantega.
The announcement was done on the day IMF Managing Director Dominique Strauss-Khan begun an official visit to the country. The IMF chief has been insisting the time has come for the leading emerging countries “to cool their overheated economies”.
“It’s a very reasonable number which shows Brazil has the capacity to grow”, said President Dilma Rousseff who added that with not much effort Brazil will expand 4.5% to 5% in 2011, although discarding the idea of emulating the 2010 record.
Rousseff said that the target of her administration is “a reasonable, sustainable and standing growth rate” and under no circumstances will inflation be left out of control. “We’ll keep an eye on stability and another on investment”, she promised.
Last year Brazil’s GDP was boosted by a 10.1% growth of manufacturing and 6.5% agriculture and livestock, according to the official statistics office IBGE. The big 2010 push followed the slight 0.3% contraction of 2009 in line with global recession.
Mantega also outlined that last year Brazil had the world’s fifth strongest growth among the G-20, behind China, India, Argentina and Turkey. “Since Brazil expanded above average we imported much more and thus helped other countries out of the crisis”.
Brazil’s Finance minister added that since the economy has begun to decelerate, this is positive because it diminishes the risk of inflation. This week the Central Bank hiked the basic Selic rate to 11.75% precisely to combat overheating of the economy and the government ratified its decision to cut budget expenditure by 30 billion US dollars.
According to the statistics office, domestic consumption (60%) was crucial for Brazil’s record GDP expansion last year together with overall investment that increased 21.8%. IBGE also indicated that the economy expanded 0.7% in the last quarter over the previous quarter, and 5% over the last quarter of 2009.