Recession at sight in US may disturb Brazil´s path for faster growing
No more than the usual - that´s what is expected from cabinet meeting President Lula is helding this Thursday to listen Minister of Finance Guido Mantega on the external finance crisis.
He´s got nothing new to say but reinforce the goodness of Brazil´s accounts and economic situation: foreing reserves are about US$ 160 bi, balance of commerce surplus around US$ 40 bi this year and inflation goals being fulfilled (around 4% and under control since Real Plan in 1994).
But Lula´s goverment has already started to act against the worst thing he could expect from now to 2010 when there will be presidential elections (Constitution doesn´t allow third terms but expects to help elect his successor based on the alliance between his Workers Party (PT) and conservative PMDB.
The turmoils in stock markets this Tuesday - São Paulo followed Dow Jones 2,1% fall and closed down 2,7%, like most of stock markets around the world, in the footsteps of US finance system crisis (Barclays, who could say that, was the one under strong market pressure at Wall Street ).
What happned today in US and in Brazil has the same logic: investors want Federal Reserve to cut basic rates (presently at 5,25% aa) anytime from the beggining of the crisis, about two weeks ago.
When they found out the Fed wouldn´t give any indications that basic rates will be cutted, even at the meeting scheduled for Sept. 18th, everything came down in the markets.
Investors selling stocks that had gone recent price rises also helped this movement, but in the center of it there´s a growing feel of uncertainity about how large will the hole be at the end of the on-going adjustment in US financial system.
Impressions in Brasilia this Tuesday night, inside goverment and among Congress people, is that the finance crisis may be deeper than we´ve been thinking up to now and it will cause a recession in American economy that certainly will cut Brazilian GNP growth from 5% this year to something like 4,5% next year.
This is not good news for Lula - today he had another bad one comming form Supreme Court that accepted the criminal denounces against 40 people involved with the gang that promoted corruption between leftist PT and rightist allied parties from 2003 to 2005.
