By Ben Tavener, Senior Contributing Reporter
RIO DE JANEIRO, BRAZIL – Brazil’s Finance Minister Guido Mantega has said he believes the Brazilian economy will return to strong growth next year of “four percent or more,” after the Instituto Brasileiro de Geografia e Estatística (Brazilian Institute of Geography and Statistics, IBGE) announced the economy had grown 0.4 percent in the second quarter of 2012.
This growth is relatively flat in comparison to the first three months of the year, or up 0.5 percent on the same period in 2011.
Mantega said the economy would return to sustained growth in the second half of 2012, and that experts – not the government – had made the prediction that GDP results for 2013 would show growth of at least four percent.
Brazil would continue to attract capital from overseas, Mantega added, despite the fact that a forty percent fall in foreign investments has been witnessed so far this year.
However, the minister did not comment on whether the government believed Brazil’s economy would grow less this year than in 2011, when it grew by 2.7 percent, after the Banco Central (Central Bank) revised down its forecast for 2012 to just 1.3 percent.
The news comes after the government extended the reduced IPI tax program for cars and white goods until at least the end of October, after it was set to expire on Friday, August 31st. The program has encouraged Brazilians to continue spending, which is hoped will help boost the economy.
A number of factors, including overstretched and aging infrastructure, repercussions from the global financial downturn – particularly in Europe, and a reduction in demand from China – Brazil’s biggest export market – for commodities such as iron ore and soya, have meant the Brazilian economy has not grown as strongly as it did in 2010, when it posted growth figures of 7.5 percent.
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