Reference Economic Scenario

The economic Module of the Projetar-e model was used to obtain a reference economic scenario. The operation of this program is described in Document 2 that is part of the present report (it describes the program and gives as example a scenario that is slightly different from the present one). In the present work we just describe the premises adopted in the considered reference scenario. Different scenarios can be chosen using the same methodology. The following premises were considered:

1. Territorial Saving Rate

The Territorial Saving Rate (1-Consumption/GNP) was considered as tending to a limit value of 27% as shown in Figure 1. The time constant adopted for coupling the last year data with the projected one was 5 years (average of the function that generates the "Poisson" integral curve).

In e&e No 22 we describe the operation of the projection program and we show the screens corresponding to the adopted reference scenario.

Territorial Saving
Current Prices, Relative to 1980 prices, Adjustment, Projection
Scenario: Reference
Figure 1: Evolution of the Territorial Saving. A significant resuming of the internal saving was assumed.

2. Capital Productivity

The capital/product ratio was chosen so that it would stabilized in the 2.6 future years and practically maintain the present level as shown in Figure 2.
Capital/Product Ratio

Projection, Adjustment, Historical Data, Projection, Scenario: Reference

Figure 2: The capital productivity was supposed to maintain the level of the last years

3. External Trade

External Trade (average of exports and imports) was assumed to increase until reaching 8% in year 2020 as shown in Figure 3.

Verified, Adjustment, Projected, Scenario: Reference, Linear (Verified)
Figure 3: External Trade Projection = (X=M)/2

It was maintained assuming some growth of the Brazilian external trade concerning the historical trend towards relative stability.
In the Commercial; Balance it was assumed a recovery of the external surplus so that the external liability would be maintained in a pre-fixed limit. The assumed values of the Commercial Balance for the intermediary years are shown in Figure 4.

External Trade
Exports, Imports, Commercial Balance, Scenario: Reference
Figure 4: Evolution of Exports and Imports and of the Commercial Balance in the Reference Scenario.

In the following table the values of the commercial balance introduced for the first years and the intermediary ones are also shown.

Table:

	1998	1999	2000	2001	2005	2010	2015	2020
Commercial Balance (% GNP)	-0.8%	-0.2%	0.3%	1.0%	2.0%	2.2%	2.5%	2.3%
External Transfers	0.0%	-1.3%	-0.8%	-0.1%	1.0%	1.2%	1.5%	1.3%

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