Neymar was on target for Brazil on Saturday as they got the better of Honduras 3-2 in the quarter-finals at St James' Park in Newcastle.
Parreira, who led Brazil to the 1994 World Cup triumph, is impressed with the 20-year-old's performance so far at the London Olympics and believes that he will be key for Mano Menezes's side for the rest of the competition.
"Brazil has a very strong team technically, very consistent, and a lot better than the rest of the teams left in the tournament," the 69-year-old told the Associated Press.
"Now that favourites like Uruguay and Spain are out, Brazil shouldn't have any opposition. But they have to be wary as in these small tournaments, you can pay dearly for any little error.
"He still has to mature a lot but at 20 he's one of the best strikers in the world and one of the few players who can make the difference in a game. He loves football, he dies to play it, and that is important."
Brazil will now take on South Korea in the semi-finals.