MercoPress. South Atlantic News Agency

Brazil modestly optimistic

Brazil is expected to grow 2,5% this year, and together with a positive trade balance and stable foreign investments should be on its way to a strong recovery next year.

Brazilian Finance Minister Pedro Malán addressing the US-Brazil Chamber of Commerce said that the economy will reach 2,5% growth, half of what was forecasted at the beginning of 2001, but far from the recession anticipated by some local economists and international risk agencies.

Brazil suffered this year an unexpected energy crisis and fears of contagion from Argentina forced a re drafting of all government original estimates.

Mr. Malán pointed out that as the Argentine situation evolved, Brazil became a victim of uncertainty, but it's now clear that "the fundamentals of the Brazilian economy are sound and with a 1,5 billion US dollars trade surplus and 19 billion US dollars in direct investments, our national accounts have become manageable".

However a poll taken among the top executives of Brazilian corporations indicated that 83% believe the world economy won't recover until 2003, and the most pressing issues for the coming year are the slowing down of the US economy, Brazilian presidential elections and the Argentine situation, which during most of the year was top of the list and hounded Brazilian stock markets and the exchange rate.

A majority of businessmen also expect an increase in sales next year although they are not so optimistic about investment.