Former Brazilian Central Bank President Affonso Pastore delivered the keynote address at EMTA’s Annual Meeting, held on Thursday, December 2, 2010. Citi hosted the event in downtown Manhattan, with approximately 300 members in attendance. In his prepared remarks, Pastore discussed potential economic growth in Brazil. In 2010, Brazil grew approximately 7.7% as the country emerged out of a short recession, and, in 2011, Pastore expects the country to grow at 4.3%, below official government forecasts of 5.5% expansion. Pastore discussed whether the government’s more optimistic target was achievable. Low domestic savings limits the rate of economic growth, he argued, and only with a significant rise in domestic savings would the economy be able to meet the government’s goal figure.
Pastore argued that an overheating Brazilian economy would need to be addressed by a rate tightening cycle. While the base assumption was that the Central Bank’s autonomy would continue, the risk of political interference remained.[...]