Turmoil in Brazil Not to Effect Economy, GDP to Grow

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Although acknowledging that forecasts for the country’s GDP growth next year continue to decline, Brazil’s Finance Minister, Henrique Meirelles, said on Monday that the government expects Brazil will register some growth already in the first quarter of next year.

Meirelles also said that the political tension caused by the recent plea-bargains by Odebrecht executives will not affect the country’s economy.

“Our expectation is that Brazil is already working with growth in the first quarter of 2017,” said Minister Meirelles during a conference in Rio de Janeiro. According to Meirelles the government is forecasting a two percent GDP growth in the comparison of the last quarter of 2017 with the last quarter of 2016.

Financial institutions surveyed by Brazil’s Central Bank for the weekly Focus Bulletin, however, are not that optimistic. The entities decreased the forecast of the GDP for 2017 from 0.70 percent to 0.58 percent. It is the ninth consecutive reduction of Gross Domestic Product by the group of over 100 financial consultancies.

The finance minister noted, however, that GDP forecasts are an average of 2017 compared to an average of 2016 and since in 2016 the GDP fell a lot, the 2017 ‘growth trend’ will start from a very low base.

Meirelles also said that the political tension caused in the past two weeks by the recent plea-bargain agreements by Odebrecht executives will not affect the country’s economy.

“It is necessary to separate things: one thing are political issues and investigations against people and another thing are the economic adjustment measures,” Minister Meirelles told the participants.

According to Meirelles the economic adjustment agenda continues normally, “This is what we have to focus on, because the Brazilian economy needs to grow again, and this is in the interest of the population,” concluded the official.