Measures being put in place to stimulate Brazil's economy
RIO — Brazil’s government is set to launch the first in a series of measures that could inject up to US $50 billion into the economy over the next five years.
The first part of the plan, announced today, includes privatising about 14,000 kilometres of railways and roads.
The privatisation of ports, lower energy costs and incentives for industry will soon follow.
The package is designed to boost what have been disappointing growth levels.
President Dilma Rousseff invited 50 leading Brazilian businessmen to the capital Brasilia where she personally launch the new strategy.
In May, she brought the businessmen to the presidential palace — the Planalto — to ask them what was needed to stimulate the economy.
Growth in Brazil is predicted to be under two per cent this year, the weakest annual performance since 2009 and a sharp slowdown from an impressive 7.5 per cent rise in 2010.
Prior to these measures, the government had been counting mainly on rising levels of domestic consumption — fuelled by credit growth and rising income among poor Brazilians — alongside investments by state companies.
Although the previous strategy had helped Brazil become the sixth largest economy in the world in 2011, overtaking Britain, the government has not been able to maintain high growth rates.
The recent weak growth has been attributed mainly to rising debt rates among the population and the global downturn, which reduced demand for Brazilian products.
Expensive energy, poor infrastructure and increasing labour costs have also weighed on growth, analysts say. (BBC)