GUIDO MANTEGA, Brazil’s finance minister (pictured), is sometimes accused of being out of touch. Cynics quip that he wants to will growth into existence rather than fix the rigid labour market, impenetrable tax code, burdensome bureaucracy and fragile public finances that have recently conspired to keep the Brazilian economy from expanding faster than a sluggish 1-2% a year. Official figures released on February 27th will have buoyed the famously upbeat Mr Mantega, without quelling concerns about the underlying health of Latin America’s biggest economy.
Brazilian GDP grew by 0.7% in the fourth quarter, quicker than the chirpiest forecasts, and by 2.3% in the whole of 2013. That outcome, the result of surprisingly perky investment and exports, has put paid to talk of a technical recession (earlier monthly readings has raised the possibility of two consecutive quarters of shrinkage).
Mr Mantega has also been trying to ease concerns about the state of the public finances. On February 20th he unveiled a revised budget for this year, with 44 billion reais ($18.5 billion) of spending cuts and a target for the primary budget surplus...Continue reading
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