Brazil's Finance Minister Guido Mantega said that for the moment there's no reason to change the country's growth estimate of 5% for 2008, in spite of global recession fears, which he believes will impact most on developed countries.
"There's nothing telling us we should abandon our optimism", said Mantega during a meeting with the press in Paris where he is holding talks with top officials from the French government. When asked about the fact that the Brazilian Central Bank estimate is 4.5% GDP expansion in 2008, Mantega reiterated that for 2008 "the government's estimate is 5%" and added that the Central Bank can be "more conservative" but for the Executive as long as new elements don't emerge "we keep to our estimates". Mantega admitted that there was a slowdown of the world economy which is affecting mainly the rich countries but which "should not have a great impact" for emerging economies such as Brazil. And if they suffer "it will only be marginally". "This crisis is showing the importance of emerging economies for the world" since they are helping compensate the deceleration in developed countries, he pointed out emphasizing "that is one of the main reasons why emerging countries should have a louder voice in decision making processes in such organizations as the G7 or the IMF". Mantega said that the latest manufacturing data from the state of Sao Paulo, the power horse of Brazil, showed a solid growth of 6.1% in the last twelve months to December compared to the same period in 2006, even when December experienced a minor seasonal adjustment of minus 1.3% in respect of last November. Data released by Sao Paulo's powerful Federation of Industries, FIESP, indicates that the 6.1% manufacturing expansion of 2007 was the highest since 2004, and was double the rate of 2006, 3%. FIESP said they had originally forecasted a 5% growth. "In 2007 the domestic market expanded far more than expected given higher employment and greater take-home pay checks. Credit also expanded reaching a record 35% of GDP", explained Walter Sacca deputy head of FIESP Economics department and a member of the visiting delegation. "2008 has begun strongly, with industry investing and contracting more people. Manufacturing activity in Sao Paulo should grow in the range of 5%", said Sacca. According to FIESP Sao Paulo's manufacturing utilization capacity reached 81.9% in December, compared to 84.1% in November and 77.8% in December 2006.