Brazilian Economic Outlook for 2011 Minister of Finance Guido Mantega

1. Brazilian Economic Outlook for 2011 Minister of Finance Guido Mantega 2011 BrazilSummit New York, April 18, 2011

2. The world economic recovery slowly continues • World divided between: • Slow growth, high unemployment and big fiscal deficits in advanced countries • Fast growth, strong job creation and inflation in emerging markets • Advanced countries have not recovered from crisis yet. • Good news: Brazil belongs to the second group (countries with high growth and employment rates).

3. New global economic scenario after 2008 crisis GDP annual average growth, in % YoY Source: IMF Produced by: Ministry of Finance

4. 2011: various recovery paces GDP forecasts, in % YoY Source: The Economist Produced by: Ministry of Finance

5. Brazil: Sustainable Growth • Strong domestic market • Increasing investment rate • Adjustments for post-crisis period: • Economic growth slowdown • Inflation control • Fiscal results strengthening • No macroeconomic imbalances

6. GDP growth led by domestic demand In %, YoY Source: IBGE Produced by: Ministry of Finance * Ministry of Finance forecasts

7. Investments reached record levels in 2010 In % YoY Source: IBGE Produced by: Ministry of Finance

8. Brazilian investment plan – PAC 1 improved GDP growth In US$ billion * PAC – Growth Acceleration Program Source: Ministry of Planning, Budget and Management Produced by: Ministry of Finance

9. Brazilian investment plan – PAC 2 supports future growth In US$ billion * PAC – Growth Acceleration Program Source: Ministry of Planning, Budget and Management Produced by: Ministry of Finance

10. Brazilian investment growth rate above other EMs In % GDP (Investment rate: 48,1% of GDP) Source: IMF and Crédit Suisse Produced by: Ministry of Finance

11. Brazil: outstanding results for the non-financial sector 168 non-financial companies balance, in US$ billions Source: Economatica Financial Consulting Produced by: Ministry of Finance

12. Banking sector growing fast in BRICS Assets of major 5 domestic banks, by country, in US$ trillions Source: Bankscope, in: IIF Capital Markets Monitor, January 2011 Produced by: Ministry of Finance

13. Brazilian stock market widens Brazilian stock market trade, in R$ billion Source: BM&F Bovespa Produced by: Ministry of Finance * Accumulated in 12 months, by March 2011

14. Brazilian economy has been adjusted to the 2011 scenario Maintenance of countercyclical policy in a context of economic recovery • Reversal of 2009-2010 economic stimulus • R$ 50 billion cut in public spending • Spending efficiency • Minimum wage at R$ 545 • Ensuring fiscal soundness • Ensuring inflation control

15. Robust primary surplus reduces nominal deficit In % of GDP Source: Brazilian Central Bank Produced by: Ministry of Finance * Ministry of Finance forecasts

16. Public Sector primary result In % GDP, accumulated in 12 months Source: National Treasury Produced by: Ministry of Finance

17. Job formalization reduces social security deficit Social security annual deficit, in % of GDP, accumulated in 12 months Source: Ministry of Finance Produced by: Ministry of Finance

18. Payroll remains stable compared to GDP In % of GDP Source: Ministry of Finance Produced by: Ministry of Finance * Ministry of Finance forecasts

19. Sound fiscal situation compared to other countries Budget balance forecasts for 2011, in % GDP Source: The Economist Produced by: Ministry of Finance

20. Inflation: a global issue Inflation forecasts for 2011, in % YoY Source: The Economist and Brazilian Central Bank Produced by: Ministry of Finance

21. Commodity-Price index- CRB Commodity-price index, 1967=100 Source: Thomson Reuters Produced by: Ministry of Finance * In March 31st, 2011

22. Oil price historic highs In US$, nominal price per barrel (Brent), average monthly and deflated by the U.S.A inflation. Source: Bloomberg Produced by: Ministry of Finance

23. Measures to moderate growth and contain inflation • Commodity inflation: depends on international markets • Stimulus to increase the supply of commodities • Government measures and objectives: • Stimulus to agricultural supply increase • Compulsory requirements increase • Brazilian Central Bank’s macroprudential measures • SELIC interest rate rise • Reduction of activity level and public expenditure • 1.5% IOF tax increase in credit operations for households

24. Inflation within the bounds set by the targeting regime. Consumer Price Index (IPCA), in % YoY *Brazilian Central Bank forecasts Source: IBGE and Brazilian Central Bank Produced by: Ministry of Finance

25. Inflation under control In % change from preceding month Source: IBGE Produced by: Ministry of Finance

26. Public transportation and fuels pressurized prices in March In % change from preceding month Source: IBGE Produced by: Ministry of Finance

27. Foreign Exchange Market In US$ million Source: Brazilian Central Bank Produced by: Ministry of Finance * In April 1st, 2011.

28. Brazilian Real appreciation in relation to selected currencies Index (January 2005 = 100), exchange rate deflated by inflation differentials Source: FED St. Louis and Brazilian Central Bank Produced by: Ministry of Finance * Position for real changes in February, 2010

29. Brazilian Real appreciation in relation to selected currencies Index (January 2009 = 100), exchange rate deflated by inflation differentials Source: FED St. Louis and Brazilian Central Bank Produced by: Ministry of Finance * Position for real changes in February, 2010

30. Brazilian Real appreciation in relation to selected currencies Index (May 2010 = 100), exchange rate deflated by inflation differentials Source: FED St. Louis and Brazilian Central Bank Produced by: Ministry of Finance