Source: Correio Braziliense Online - Brasília / DF - ECONOMY - 22/07/2010

Brazil will grow 7,6% in 2010. The forecast is from the Economic Commission for Latin America and the Caribbean (ECLAC), which released its economic study for the 2009-2010 period in Chile yesterday. "It is an optimistic projection, but based on the breath that the economy has been showing this year," economist Carlos Mussi, responsible for ECLAC for analyzing the Brazilian situation, told Correio. The estimate was made based on the indicators released in the country until the beginning of May, and, after the first quarter, there was a slowdown in the economy. But, according to Mussi, this difference would not significantly alter ECLAC's projection.

For 2011, ECLAC forecasts that the Brazilian Gross Domestic Product (GDP) will grow 4,5%. “In part, the growth estimate for next year is lower due to a statistical effect (the Brazilian economy is growing fast because the previous base was low due to the crisis). In addition, there are uncertainties in the international economy, ”said Mussi.

For the entire region of Latin America and the Caribbean, the growth estimated by ECLAC is 5,2% this year. “Growth is higher than expected. But the performance is very heterogeneous within the region. Mercosur and the States that had the greatest capacity to implement public policies stand out, ”said ECLAC's executive secretary, Alicia Bárcena, when presenting the study in Santiago, Chile to the press.

Executive secretary presents the study in Santiago, Chile

In addition to Brazil, the highest growth rates are observed in Uruguay (7%), Paraguay (7%), Argentina (6,8%) and Peru (6,7%). The Dominican Republic will grow 6%; Panama, 5%; Bolivia, 4,5%; Chile, 4,3%; Mexico, 4,1%; Colombia, 3,7%; Ecuador and Honduras, 2,5%; Nicaragua and Guatemala, 2%. According to the study, Venezuela will fall by 3% and Haiti by 8,5%, as a result of the effects of the earthquake that destroyed the country in January this year.

Santander economist Cristiano Souza believes that ECLAC's projections are in line with those of the market for the region. “The scenario for Latin America is good. It was the continent least affected by the crisis, ”he said. For Brazil, Santander expects growth of 7,8%. "In Brazil, domestic demand is the major factor in stimulating growth," said Souza.

FAT HAS A BALANCE OF R $ 3,2 BI
»The Worker Support Fund (FAT) recorded a positive balance of R $ 3,2 billion in the first half. The amount is 88,15% higher than that registered in the same period in 2009. FAT funds are used to fund unemployment insurance, salary bonus programs and to finance professional qualification.

The main source of revenue is contributions to Pis-Pasep, through the Caixa Econômica Federal regime, which transferred R $ 13,8 billion to the fund (an increase of 22,64%). Among the expenses, R $ 10,19 billion were allocated to the payment of unemployment insurance, an increase of 2,35% in relation to the first semester of 2009. To pay the salary bonus, the account was R $ 163,5 millions. In other developed projects and activities, the expense was R $ 107,9 million.

GDP forecasts

Brazil / 7,6%
Uruguay / 7,0%
Paraguay / 7,0%
Argentina / 6,8%
Peru / 6,7%
Dominican Republic / 6,0%
Panama / 5,0%
Bolivia / 4,5%
Chile / 4,3%
Mexico / 4,1%
Colombia / 3,7%
Venezuela / -3,0%
Haiti / -8,5%

Source: ECLAC

Informal activity
The informal generation of wealth in Brazil grew 61,9% between 2003 and 2009. In the calculations of the Getulio Vargas Foundation (FGV), the “underground economy” jumped from R $ 357 billion to R $ 578,4 billion in the period. Proportionally, however, activity that skips labor costs decreased from 21% of GDP to 18,4%. According to the economist Fernando de Holanda Barbosa, responsible for the research, this apparent contradiction is due to the expansion of the formal Gross Domestic Product (GDP), which went from R $ 1,7 billion to R $ 3,14 billion.

The decline also occurred due to the increase in the number of people in formal employment, the expansion of credit, the greater commercial opening to imports and tax simplifications in recent years. "If the economy grows around 7%, it is feasible that the underground economy will decrease to 18% of GDP at the end of this year," said Barbosa. In the opinion of the researchers, the economic expansion allows greater efficiency in production and the formalization of the labor market.

Despite the downturn in informality, its magnitude still worries. In the 30 countries of the Organization for Economic Cooperation and Development (OECD), the index is around 10% of GDP. "To get an idea of ​​the size of the problem, just remember that Brazil's underground economy exceeds Argentina's GDP," warned André Franco Montoro Filho, executive director of the Brazilian Institute of Ethics in Competition (ETCO), which commissioned the study.

For the president of the Advisory Council of Etco, former Minister of Finance Marcílio Marques Moreira, it is necessary to differentiate illegal activities, such as drug and arms trafficking, from those related to legalized products and services, such as the work of street vendors. In addition, the income generated by the underground economy ends up entering the formal world.

In the assessment of the president of the ETCO advisory council, Marcílio Marques Moreira, it is necessary to differentiate activities related to illegal products, such as drug and arms trafficking, from those of legal but informal products, such as street vendors. "Everyone who buys an umbrella from a street vendor is a little informal," he said. In addition, there is a difficulty in measuring the income generated by informality. “Part of it goes back to the economy. A street vendor, for example, makes purchases in supermarkets. The government receives part of this in revenue, ”said Barbosa.

The number
$ 578,4 billion
Size of the underground economy in the country, according to FGV