Low Investment-to-GDP Rate Threatens Growth in Brazil
April 1, 2011 By
Brazil’s rate of fixed investment as a percentage of GDP is too low to achieve sustainable economic expansion of 4.5 percent annually, according to Albert Fishlow, Professor Emeritus at Columbia University and the University of California at Berkeley.
Fishlow spoke this morning about Brazil’s economic prospects under the Rousseff administration at a lecture hosted by the University of Miami’s Center for Hemispheric Policy. Mauricio Mesquita Moreira, Principal Economist at the Inter-American Development Bank, and John Welch, Chief Emerging Markets Strategist with Macquarie Capital, joined Fishlow on the panel of experts.
Brazil’s level of investment-to-GDP was 18.7 percent in 2010. This figure pales in comparison to China’s (45 percent) and trails investment rates of other Latin American nations, including Peru (24 percent) and Chile (23 percent).
In order to realize sustainable growth, investment in Brazil will require more domestic savings and less reliance on foreign capital, which is unpredictable. The key to lifting per-capita incomes—one of the goals of the Rousseff administration—is to increase productivity. This will require much more investment, says Fishlow.
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Fishlow spoke this morning about Brazil’s economic prospects under the Rousseff administration at a lecture hosted by the University of Miami’s Center for Hemispheric Policy. Mauricio Mesquita Moreira, Principal Economist at the Inter-American Development Bank, and John Welch, Chief Emerging Markets Strategist with Macquarie Capital, joined Fishlow on the panel of experts.
Brazil’s level of investment-to-GDP was 18.7 percent in 2010. This figure pales in comparison to China’s (45 percent) and trails investment rates of other Latin American nations, including Peru (24 percent) and Chile (23 percent).
In order to realize sustainable growth, investment in Brazil will require more domestic savings and less reliance on foreign capital, which is unpredictable. The key to lifting per-capita incomes—one of the goals of the Rousseff administration—is to increase productivity. This will require much more investment, says Fishlow.
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