According to Marcio Alaor, a BMG bank executive, for the first time since 2001, China’s Gross Domestic Product (GDP) is estimated to be under 7% in 2015. According to Alaor China’s numbers only increased 6.8% in 2015 and will probably decrease to 6.5% in 2016 and 6.2% in 2017. The lower growth rate has effected the overall global growth as China is a major supplier of commodities. Experts suggest that China develops a fiscal strategy that includes social protection, environment-related investments and invest in infrastructure. Stimulus measures are predicted from the Chinese government in order to set prices for international raw material as well as a look at their cooperation policies.
Alaor reports that Brazil has seen an economic decrease of 3.1% in 2015. It is predicted that the country will see an additional drop of 1.1% in 2016 but will see a bounce back in 2017. He attributes the decline in economy is to the decrease in use of goods in Brazil. There is a decrease in use of goods because families are unable to afford the 49% increase in the cost of living and buy less in order to save on money spent. Experts point out that the growth of Brazil is due to three aspects; credit, exports and technology. Unlike BMG Bank, most loan companies offer high interest loans that most Brazilians cannot afford. This will reduce the need for loans and will aid in reducing fees in the future. While loan interests will be reduced, Alaor says that Brazilians should emphasize the short-term problems but focus on the long-term issues. He points out that tax issues should not ignored when there was just a 28% increase which caused Brazilian products to become competitive. Furthermore, markets, like agriculture, were opened allowing for recover, says Alaor. In addition to markets opening, beef export has increased and reached record sales of 138.7 thousand tons in October.
Australia an Economic Example
Alaor use the Australia economy as an example of constancy during the possibility of impending crisis. Alaor states that the reason that Australia has a strong economy is because they are a supplier of major commodities. Commodities including soy beans, wheat, iron and aluminum. Even during the crisis of 2008 Australia was able to have stability. Prices China slowed down considerably while Australia continued to stimulate growth within its country. According to Alaor, Australia grew 1.4% in 2009 and continue to grow 2% each year. Many economists credit Australia’s success to their implementation of cutting tax for small businesses and push for new construction, which improves job opportunities. Australia’s recently have seen growth of 2.5% in 2015, according to Alaor.