Finance minister Guido Mantega said the latest release from investment bank Credit Suisse forecasting Brazil’s 2012 GDP growth at 1.5%, was “a joke”.
“Our GDP growth is going to be a lot more than that,” he told Brazilian reporters after being rushed outside from the Rio+20 conference on sustainable development taking place in the city of Rio do Janeiro.
Mantega first forecast Brazil GDP at 4% this year, but has since revisited it to “we’ll be happy with 2.6%” growth, which is what the economy did last year.
Deutsche Bank, one of the early banks to reduce their forecast for Brazil GDP said about three weeks ago now that the country was an underweight for now and will likely disappoint with just 2.5% growth.
Then earlier this month Brazil’s Central Bank president Alexandre Tombini told the Senate Economics Committee that the Bank’s estimating just 2.5% growth in 2012.
Credit Suisse said that there was less demand in Brazil, and in some areas, production has been reduced to make up for that falling demand — both in Brazil and abroad. Credit Suisse used Brazilian agribusiness as a case in point.
The country is the world’s leading beef and poultry exporter, as well as the world’s No. 2 soy exporter and No. 1 sugar, orange juice and coffee bean exporter. Agribusiness output was the worst performer in the first quarter.
“The reduction in our GDP forecast in the second half is due to the continued uncertainties in the global economy and the low probability that the Brazilian economy will be able to expand enough in the next two quarters,” Credit Suisse economists said in the report.