3/10/2014 @ 10:20上午
Brazil’s GDP will come in lower than expected this year, according to the Central Bank’s Focus survey released on Monday.
The average response from economists at Brazil’s biggest investment banks suggests 2014 GDP coming in at 1.68% from a previous forecast of 1.7%. Next Next year’s GDP target stood unchanged at 2%. Four weeks ago, projections were 1.9% and 2.2% respectively, suggesting the nation’s economists are increasingly bearish.
On Monday, the iShares MSCI MSCI Brazil (EWZ) exchange traded fund was down 1.26%, adding to the year’s 10.83% decline. Brazil is underperforming the MSCI Emerging Markets Index.
Brazil’s government remains in good financial health, however. The debt-to-GDP ratio is seen falling to 34.7% from 34.95% four weeks ago. This is for public debt in relation to GDP, a metric top-down investors use to consider the country’s ability to pay its bills.
The current account deficit is seen holding relatively steady at $75 billion this year, falling to $67.9 billion next year. At the same time Brazil’s trade surplus will likely shrink further to $6.36 billion from last week’s estimate of $7 billion and last month’s estimate of $8 billion. Brazil’s trade surplus has been shrinking for years. Five years ago, it was in the teens. In the first two months of 2014, Brazil registered a $6.1 billion deficit with its trading partners, its worst trade figure in a decade.
Foreign direct investment, while strong, could slip next year to $55 billion from an estimated $58 billion this year. Foreign firms have been sinking millions into Brazil’s oil industry following discoveries of deep sea hydrocarbons in 2007 and 2008.
A recent study by McKinsey & Company McKinsey & Company says that Brazil’s lackluster productivity is also hindering growth. Labor productivity in Brazil rose 1% on average over the last 25 years, according to McKinsey, far below the emerging markets average and below that of United States.
If productivity improved in Brazil — from labor to education to capital investments — Brazil’s GDP between 1990 and 2010 would have averaged 4.5% instead of 3.1%, according to the study.