|No 55 Em Português|
Note 1: Internal Savings
e&e : the Organization and the Periodical
The e&e Organization
Texts for Discussion
Carlos Feu Alvim, Omar Campos Ferreira, José Israel Vargas
Methane concentration in the atmosphere has doubled after the Industrial Era and is responsible for 20% of the greenhouse effect produced by mankind. The Kyoto Protocol has established an equivalence that according to the Brazilian representatives overvalues these emissions because it does not considers adequately its long-term effect. The measures analyzed in the present report show that the concentration in the atmosphere is stabilizing and that the growth decrease has occurred long before the measures taken to reduce its emission. These measures add another doubt regarding the emphasis given to methane emissions in the mechanisms of clean development projects.
Periodically the Economy and Energy – e&e presents a growth scenario forecast. The so-called Reference Scenario corresponds to following the observed trends of the parameters that limit (and determine) growth according to the adopted model.
The results of the two previous projections (eleven and six years ago) presented results that are rather satisfactory. Particularly, the GDP projections for the 1993/2003 period corresponded almost exactly to the actual growth.
The objective of the e&e Organization in the next months is to revise the historical behavior of the parameters that characterize growth and to make an evaluation of their future trends.
The first step is to improve the projection methodology; the second and more ambitious one is to point out route corrections so that limitations to the Brazilian growth can be removed. As a matter of fact, the e&e Organization and the Ministry of Science and Technology – MCT, have signed a Partnership contract aiming at increasing the capital productivity by seeking a larger productivity (and jobs) using the existing capital goods.
The present publication corresponds to the “run” using data available until 2005. The projected average growth until 2026 is 4.5% annually which, even though higher than the value observed in the last two decades, is far from satisfying the Brazilian aspirations. For the present three-year period, the expected growth is 4.2%.
The hypothesis formulated and the evolution of the main parameters are described.
(Note 1 revision of variables behavior used in the projection)
Investment in real goods (Gross Formation of Fixed Capital) is the resultant of internal savings + external savings. In the national accounts configuration, internal savings correspond to the non-consumed fraction of the Gross Domestic Product and the external savings, to the net transfers from abroad.
The analysis reveals that at the beginning of the 90s there has been an important gap in the internal savings that coincided with high, long-term real interests. This gap in the internal savings has not been compensated, as expected, by the incoming of external savings. As a result, investments have dropped and growth was limited. It is discussed the hypothesis that internal growth will resume the growth pace observed until the end of the 80s, which could increase the GDP growth pace.
Graphic Edition/Edição Gráfica:
Monday, 09 May 2011.