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Brazil wants foreign investors for local projects
February 27, 2013, 6:32 am

Mantega is on a tour to foreign capitals to convince investors in Brazilian projects [Getty Images]

Mantega is on a tour to foreign capitals to convince investors in Brazilian projects [Getty Images]

Brazilian finance minister Guido Mantega arrived in New York Tuesday, his first stop on a global tour with government officials to promote foreign direct investment in his country.

In New York, he met with 250 fund managers, according to the Wall Street Journal, to convince them to buy into a new airport in Rio de Janeiro and other development projects.

But it is likely to be a hard sell for the minister who will next head to London and then Tokyo.

Despite the efforts of the government of President Dilma Rousseff, Brazil has grappled with persistent inflation rates in the past two years.

Brazil’s economic growth, which stood at a healthy 7.5 per cent in 2010, has been battered due to the recession still beleaguering Europe and declining demand for Brazilian goods.

Economists slashed Brazil’s growth in 2012 from 1.5 to just 1 per cent with inflation having reached 6.15 per cent in 2012.

The discouraging figures are not likely to boost the economic policies of Brazilian President Dilma Rousseff, who in recent months turned to cutting electricity-taxes, extending payroll-tax cuts, and lowering taxes on cars and clothing in a bid to slash inflation and get the economy out of its virtual freeze.

Brazil also plans to scrap all federal taxes on its basket of staple foods as the government seeks to slow inflation in Latin America’s biggest economy, Dilma Rousseff, the Brazilian President said in early February.

However, positive figures such as its 5.5 per cent unemployment in 2012 are only set to improve as the labour market looks to hire again. In December, the unemployment rate was down to 4.6 per cent.

“Brazil’s economy will expand 3 per cent to 4 per cent this [2013] year,” Mantega, has maintained.

But a central bank survey of chief economists shows that they cut their forecasts for growth this year for the fourth consecutive week to 3.10 per cent.