Analyst says domestic market will save Brazil from new crisis

A former analyst at the Central Bank, now a professor at the University of Brasilia and member of the Federal Economics Council (“Conselho Federal de Economia”), Newton Marques, says that once again (referring to what happened in 2008-09), the domestic market will save Brazil as the world moves into global economic troubles. “The dollar is tanking everywhere and that means demand abroad for Brazilian goods will fall. Under the circumstances, discussion of the exchange rate and the rating agency downgrading of the United States are moot points (‘discurso morto’).”

According to Marques, the crisis will certainly affect Brazil. “However, we are in a privileged position. We may be forced to retreat, to take a step back, but, then, we will be able to move forward quickly, take ten steps ahead. First of all, our financial system has been adjusted and we have international reserves of $300 billion. There is an exchange rate problem? Yes, but everybody has an exchange rate problem. It is not just our business sector. Second, Brazil is one of only a few countries that still has room for agricultural expansion (“fronteiras agrícolas”). We can expand cropland and feed the world. We also have abundant raw material. Third, we have income distribution programs that are increasing the salary mass. In other words, the domestic market is expanding. This is attractive to the foreign investor,” said Marques. “All this is reason for us to applaud former president Luiz Inacio Lula da Silva,” he concluded.