The latest macroeconomic data showed that Brazil not only had the strength to fight the crisis but also that the country emerged stronger from it. Most of the countries are leaving the crisis slowly and with important macroeconomic imbalances, most notably in the fiscal arena. It can be noted, however, that Brazil is resuming its economic growth in a fast and consistent way, growing 8% in the 3rd Quarter of 2009 (annualized).

This optimistic scenario is confirmed by the latest economic activity data: a record in the number of vehicles licensed in 2009, more than 1 million formal jobs created until October 2009, outstanding growth in the credit concessions and a 5% growth in services and retail sales.

This new cycle of economic growth will be stronger than the one seen in the last decade and will be supported by robust public and private investments, consistent growth of the domestic market and a rigorous production of commodities. There will be no better investment opportunities around the world such as those that will be seen in Brazil. In the following years the country will host a big and diversified set of investments.

The housing program “Minha Casa Minha Vida”, the World Cup in 2014 and the Olympic Games in 2016 will demand new investments in infrastructure. The exploration of gigantic oil reserves discovered in the seashore will also spur investments in the whole supply chain of oil.

A 2% tax on the flow of foreign money directed to purchase domestic stocks and fixed–income securities reduced the incentives for short-term investors and prevented an overvaluation of the Brazilian Real, without affecting the returns of long-term investments.

With this new development growth cycle taking place in Brazil the question is no longer whether the country will become the fifth world economy but when it will happen.

Guido Mantega
Minister of Finance