After two years in the doldrums, Brazil’s industrial sector expressed confidence Monday that it could rebound and grow 4.1 percent next year — if the government takes additional stimulus measures.
“In 2013, we will undoubtedly grow more than in 2012,” Flavio Castelo Branco, chief economist of the National Confederation of Industry (CNI) said.
“With competitiveness gains, we can expand four percent or more in a sustainable fashion. Without them, the ceiling is three percent,” said the CNI, describing 2012 as “a lost year”.
The Brazilian government has said it hopes its recent measures to boost industry and consumption will bear fruit in the second half of this year, but companies have stressed the urgent need for structural reforms.
The CNI said in its report that the Brazilian growth model, “based only on consumption, is unsustainable,” and slammed high financing costs, excessive red tape, a shortage of skilled workers and a costly and complicated tax system.
“We believe that the government has implemented good measures which go in the right direction, but they are not enough,” according to CNI President Robson de Andrade.
The CNI said Brazil’s industrial GDP will have contracted 0.6 percent by the end of 2012. The manufacturing sector will fare worst with a two percent contraction this year while mining will fall one percent, the group added.
Another major worry is productive investment, which will close the year with a 4.5 percent contraction. “We need to double investment,” said de Andrade.
The industrial sector grew a mere 0.3 percent in 2011, after expanding a sizzling 10.5 percent in 2010.
Meanwhile the foreign trade ministry said Monday that the country posted a $186 million trade deficit in November, down from a surplus of $571 million during the same month of 2011.
Between January and November, Brazil, the world’s sixth largest economy, recorded a surplus of $17.18 billion, down 33.9 percent compared with the same period 12 months ago.
In November, exports totaled $20.47 billion, down six percent compared with a year earlier but up 3.5 percent compared with October, the ministry said.
And imports reached $20.65 billion in November, down 2.6 percent from the figure for November last year but up 13 percent over October.
The November trade deficit was mainly due to a 12 percent fall in sales of commodities and a 14 percent slump in those of semi-manufactured goods.
Brazilian industry hopeful of 2013 rebound
