ING Barings revises 1998 Brazil forecasts
Reuters, Monday, November 10, 1997 at 15:03
By Martin Langfield
MIAMI, Nov 10 (Reuters) - ING Barings said Monday it was revising its 1998 economic forecasts for Brazil following the Brazilian government's announcement of a much-anticipated budget-slashing plan.
"ING Barings is hereby revising its 1998 economic projections for that country," the firm's chief economist for the Americas, Arturo Porzecanski, said at a Barings Latin American conference here, in reference to Brazil.
He said Barings now projected real GDP growth of not more than two percent, compared to its previous projection of 3.5 percent, and saw 1998 inflation at three percent rather than 4.5 percent.
Barings revised its 1998 current account deficit projection to less than $35 billion from around $40 billion previously.
Porzecanski said projections for 1997 were unchanged at three percent for real GDP growth, no more than six percent inflation and a current account deficit of around $35 billion.
Barings economist Mauro Schneider, addressing the conference by telephone from Brazil, said his overall view of the plan was positive, adding that he thought the Brazilian government had shown "great agility" in announcing the plan now and was demonstrating a willingness to defend the country's currency, the real.
He also said the size of the plan, which could produce savings and extra income of $18 billion, was also "significantly above market expectations."
"We don't believe all the measures will be implemented," he
said.
"But even if 60-70 percent of the measures are implemented, this may help the government to generate a large...surplus in 1998, compensating for larger interest payments."
He said the Brazilian Congress could still hold up some measures.
"The situation is critical but the Brazilian Congress is still the same," he said.
Copyright 1997, Reuters News Service |
