Brasil and Argentina represent more than 85% of the Mercosur free trade zone area.
The INDEC (Instituto Nacional de Estatística e Censo) announced recently, that the Argentinian GDP increased 9,2% in 2010. This is a major improvement after the financial crisis in 2009 (0,9%). The production of goods increased 10,6% in particular through activities in the agricultural sectors. The service sector even showed an spectacular growth of 76% in 2010.
This positive development is due to an interesting growth of industrial production (automotive & suppliers) to 9.7%. Since 2003 Argentina showed an remarkable yearly growth of about 9%, interrupted in 2008 (7,1%) and 2009.
To the contrary, Brazilian authorities try to control market overheating, as already noted in the last blog post. Economists from the ITAU revised now their GDP analysis from 4.0% to 3,6% for 2011 and a forecast to 3,8% for 2012, which underlines the success of this activities.
It is expected that the base lending rate (taxa selic) will be reduced from 75 to 50 base points. The economists expect further an global economic increase from 4,2% to 4,4% in 2011.
According to an announcement of the IBGE, the Brazilian statistical authority, on march 4th, the GDP increased 7,5% in 2010. This is the biggest economic growth in one year since 1985. Brasil could outperform Italy and take the seventh place in the ranking of the world biggest economies. The actual Italian figures are expected at the beginning of April.
This figures also lead to some preoccupation about inflationary tendencies and are seen as effects of economical overheating. With a massive control of the monetary policies, the Brazilian Central Bank achieved already results to reduce this thread, gaining smaller growth rates in the Q4/2010, and a continuing decrease in 2011. Actual figures expect an economic growth target of about 4% for Q1/2011. It is expected, that this will reduce inflation danger – measured recently up to 6,7% – substantially.
Import tax load is an important parameter for foreign companies to decide wether to enter a foreign market or not. Often used to protect the national economic sectors, is also has to be seen as an critical parameter in the competition between the BRIC states for new technologies and investors.
Recently China announced (article), that it intends to reduce the import tax level for several high tech products to open the markets for worldwide investors. Named reasons were
- a reduction of the critical export dependence
- a massiv support for the domestic demand (chinese households deliver only 35% of the GDP in 2009)
To the contrary, some weeks ago, the Brazilian secretary of trade announced, that it is intended to increase import taxes in Brazil for luxury goods to 35%.
How will the chinese regulatory changes affect the behaviour of the other BRIC states, namely Brazil?
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