macroeconomic perspectives after the crisis nelson barbosa secretary of economic policy
Post on 23-Feb-2016
37 Views
Preview:
DESCRIPTION
TRANSCRIPT
Ministério da Fazenda
1
Macroeconomic Perspectives after
the Crisis
Nelson BarbosaSecretary of Economic Policy
New York, 4 November 2009
Ministério da Fazenda
2
ECONOMIC RECOVERY AND THE “DDD” SYNDROME
Ministério da Fazenda
3 Source: IBGE. Ellaborated by: MF/SPE
INDUSTRIAL PRODUCTIONSeas. Adjust. Index (jan/2007 = 100)
111.5
89.0
101.9
80
85
90
95
100
105
110
115
4Q 2008
Ministério da Fazenda
4
Unemployment rate
Source: IBGE. Elaborated by: MF/SPE
6
7
8
9
10
11
12
13
14unemployment rate
seasonally adjusted
Ministério da Fazenda
5 Source: IBGE. Ellaborated by: MF/SPE.
GDP GROWTH (SAAR)
-13.0
-3.8
7.8
-15
-10
-5
0
5
10
15
II.03
IV.0
3
II.04
IV.0
4
II.05
IV.0
5
II.06
IV.0
6
II.07
IV.0
7
II.08
IV.0
8
II.09
Ministério da Fazenda
6
Evolution of the Macroeconomic Debate
(The DDD Syndrome) Decoupling: the economy will not be hardly hit
by the crisis, this time is different. Disaster: the economy will not recover, this time
is not different and there will be recession, current account deficits and high unemployment
Deficit: the economy recovered, but the fiscal and current-account deficits generated by economic policy will become a problem.
Ministério da Fazenda
7
An Old Look on Fiscal Policy and Debt:
“'At every stage in the growth of the debt it has been seriously asserted by wise men that bankruptcy and ruin were at hand. Yet still the debt went on growing, and still bankruptcy and ruin were as remote as ever."
Lord Thomas Macaulay
Ministério da Fazenda
8
Back to the structural questions: Inflation and monetary policy:
How low can the real interest rate go? Is it sustainable?
Budget balance and public debt:What is the trend? Is it sustainable?
Exchange rate:How low can the BRL/USD exchange
rate go? Is it sustainable?
Ministério da Fazenda
9
INTEREST RATE, INFLATION AND GROWTH
Ministério da Fazenda
10*/ Up to October 23rd/2009Sources: BM&F e BCB. Ellaborated by: MF/SPE
ANNUAL INTEREST RATES
8.75
5.40
-
5
10
15
20
25
30 Selic rate target end of month Real ex-ante rate
(*)
Ministério da Fazenda
11
10 years of inflation targetting
* Market forecasts (Focus 10/30/09 )Sources: IBGE e BCB Ellaborated by: MF/SPE
8.9
6.0
7.7
12.5
9.3
7.6
5.7
3.1 4.5
5.9 4.3 4.5 4.5
0
2
4
6
8
10
12
14
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* 2010* 2011*
CONSUMERS PRICE INDEX, (% change accum. in 12 months)
Ministério da Fazenda
12
GDP ANNUAL GROWTH RATE
2.1
3.4
1.0
4.5 4.9
0
12
34
56
Average (1999-02) Average (2003-05) Average (2006-08)
*/ Government forecasts. Source: IBGE Ellaborated by: MF/SPE.
Ministério da Fazenda
13
FISCAL POLICY AND PUBLIC DEBT
Ministério da Fazenda
14
Fiscal Targets and Fiscal Space in 2009-10
Primary balance in 2009: 2.50% of GDP before investment; and 1.56% of GDP after investment
Primary balance in 2010: 3.30% of GDP, before investment; and 2.65% of GDP, after investment.
Sovereign Wealth Fund: +0.50% of GDP in primary revenues when necessary.
Allocation of PAC expenditures: part of the 2009 budget can be transferred to the 2010 budget.
Ministério da Fazenda
1515 Source: BCB Ellaborated by: MF/SPE
Primary and Total Budget balancein % of GDP
(*) 12 months up to Sep/09
3.2 3.3 3.8 3.9 3.2 3.5 3.7
1.2
(4.4)(5.1)
(2.8) (3.4) (3.5)(2.8)
(2.0)
(4.3)
2002 2003 2004 2005 2006 2007 2008 2009 *
Nominal Primary
Ministério da Fazenda
1616 Source: BCB Ellaborated by: MF/SPE
RATIO OF NET PUBLIC DEBT TO GDP
43.9
43.1 43.3
42.642.2 42.1 41.8 42.0 41.8
40.0
38.6
37.7
38.8
39.640.0
40.6
41.4
42.643.3
44.0 44.0
44.9
Ministério da Fazenda
17
Net Borrowing by Institutional Sector(in % of GDP, 12-month average)
Source: BCB Ellaborated by: MF/SPE
2003
.01
2003
.04
2003
.07
2003
.10
2004
.01
2004
.04
2004
.07
2004
.10
2005
.01
2005
.04
2005
.07
2005
.10
2006
.01
2006
.04
2006
.07
2006
.10
2007
.01
2007
.04
2007
.07
2007
.10
2008
.01
2008
.04
2008
.07
2008
.10
2009
.01
2009
.04
2009
.07-8.0
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0 BR EXTERNAL SECTOR BR PUBLIC ADM.BR PRIVATE SECTOR
Ministério da Fazenda
18
FEDERAL GOVERNMENT: PRIMARY BALANCE
*/ 12 months up to Sep/09 Source: STN/MF Elaborado: SPE/MF
% of GDP 2002 2003 2004 2005 2006 2007 2008 2009 (*)
NET PRIMARY REVENUES 17.9% 17.4% 18.1% 18.8% 19.0% 19.8% 20.2% 19.4%
PRIMARY EXPENDITURES 15.7% 15.1% 15.6% 16.4% 17.0% 17.5% 17.2% 18.7% - Government payroll 4.8% 4.5% 4.3% 4.3% 4.5% 4.5% 4.5% 5.0% - Income transfers 6.9% 7.2% 7.6% 8.1% 8.4% 8.7% 8.6% 9.2% - Investments 0.8% 0.3% 0.5% 0.5% 0.6% 0.7% 0.9% 1.0% - Other expenditures 3.2% 3.1% 3.2% 3.5% 3.4% 3.6% 3.3% 3.5%
PRIMARY BALANCE 2.2% 2.3% 2.5% 2.5% 2.1% 2.2% 3.0% 0.7%
Ministério da Fazenda
17.9 17.4
18.1 18.8 19.0
19.8 20.2 19.4
11.0 10.2 10.5 10.8 10.6 11.0
11.7
10.2
8
10
12
14
16
18
20
22
2002 2003 2004 2005 2006 2007 2008 2009*
NET PRIMARY REVENUES
NET PRIMARY REVENUES LESS INCOME TRANSFERS
AS % OF GDP
FEDERAL GOVERNMENT: PRIMARY SURPLUS
*/ 12 months up to Sep/09 Source: MF/STN Ellaborated by: MF/SPE
19
Ministério da Fazenda
20
Central Government Primary Expenditures Composition2002-2009
• * 12 months up to Sep/09• **/ Includes Bolsa Família expendituresSource: MF/STN Ellaborated by: MF/SPE
Government payroll; 30.6%
Income Transfers**;
43.9%
Investments; 5.3%
Current expenditures;
20.3%Government
payroll; 26.7%
Income Transfers**;
49.2%
Investments; 5.2%
Current Expenditures;
18.9%2002 2009*
Ministério da Fazenda
21
Long-Term Policy to Control Fiscal Primary Expenditures
Income transfers and payroll expenditures comprise 76% of the federal primary expenditures.
Payroll management: annual ceiling for the real growth rate of expenditures
Social-security challenges: minimum-wage policy, minimum age limits, requirements for risk benefits, and public employment.
Ministério da Fazenda
22
Central Government Expenditures Composition2002-2009
* 12 months up to Sep/09Source: MF/STN Ellaborated by: MF/SPE
Total Primary Expenditure;
66.2%
Expenditures on interest ;
33.8%
Total Primary Expenditure;
82.2%
Expenditures on interest ;
17.8%2002 2009*
Ministério da Fazenda
23
EXCHANGE RATE AND BALANCE OF PAYMENTS
Ministério da Fazenda
Trade Balance(US$ bilions)
73
96 119
138 161
198
152
48 63
74 91
121
173
126
2003 2004 2005 2006 2007 2008 2009 Forecast
Exports ImportsMarket
expectations*
*/ FOCUS – (10/30/2009). Source: MDIC and BCB Elaborated by: MF/SPE
Ministério da Fazenda
14.1 9.9 8.3 12.5
-9.4
27.5 22.0 26.0
-7.6
4.2 11.714.0
13.6
1.6
-24.5 -16.9
2002 2003 2004 2005 2006 2007 2008 2009*
Current Account NetFDI-Net
Market expectations
for 2009
Foreign Direct Investment (net) xCurrent account
(US$ billion)
*/ Focus (10/30/09). Source: BCB Ellaborated by: MF/SPE
Ministério da Fazenda
26
Monthly foreign currency flow* (US$ billion)
*/ Up to October 23rd/2009Source: BCB. Ellaborated by: MF/SPE
Total financial outflow: $27 billions
Total financial inflow: $22.3 billion
7.0
1.6 3.1-0.1 0.5
2.9 3.1 4.91.6
-0.1 -2.81.3
-3.20.8
-4.2-6.2
-10.3-6.3
-3.5 -2.0 -3.9 -3.5
1.6 1.2 4.1 1.6 4.6
12.0Net financialNet commercial
Ministério da Fazenda
27
INTERNATIONAL RESERVES(US$ billion)
(*) Up to October 29th /2009.Source: BCB. Ellaborated by: MF/SPE.
233.0
30
80
130
180
230
Oct-06 Feb-07 Jun-07 Oct-07 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09(*)
Ministério da Fazenda
28
Nominal BRL/USD exchange rate
Source: BCB. Ellaborated by: MF/SPE.
1.5
1.8
2.0
2.3
2.5
2.8
3.0
3.3 R$/US$
Ministério da Fazenda
29
Effective real exchange rate (*)(Index: Jun/94 = 100)
(*) Average of brazilian currency related to the currencies of 15 countries, weighted by the participation of these countries in brazilian exports Source:BCB. Ellaborated by: MF/SPE.
40
60
80
100
120
140
160
180
top related