Brazil Grows 6% in First Half and Expects 5.5% Growth in 2008

    Brazilian industry

    Brazilian industry According to the latest release from the IBGE (Brazilian Institute of Geography and Statistics). Brazil's economy expanded 6.1% in the second quarter of 2008 compared to the same period a year ago and 1.6% over the previous quarter, Similarly in the first half of this year Brazil's GDP increased 6% compared to the same period a year ago.

    In the second quarter fixed capital investments advanced 5.4% over the first quarter and comparing the two half years (07 and 08), the increase was 16.2%. The farming sector was particularly dynamic having increased 7.1% over the second quarter of last year and 5.2% when the two half years are compared.

    Services grew 1.3% in the second quarter while the accumulated growth, January/June was 6.3%. Manufacturing expansion was 5.7% over the same period in 2007 and the 2008 six month expansion reached 6.3% over half 2007. Family consumption jumped 6.7% in the second quarter and accumulates 6.7% in the first half of 2008.

    Brazil's economy is forecasted to expand 4.8% this year compared to 5.4% in 2007 the fastest growth rate in three years.

    Finance Minister Guido Mantega said the figures released on Wednesday with strong capital investments are proof that Brazil is poised for sustained growth in the years to come.

    "This growth is quality growth because one of the items that raised the most was investments," Mantega said. "We should end the year with a very good performance, between 5 and 5.5%." But Mantega also expressed concern about robust domestic demand potentially driving up inflation, "I would like to see a slowdown in consumption."

    After operating in shaky territory for most of Wednesday, September 10, the Bovespa, São Paulo, Brazil's stock exchange, went up north in mid-afternoon rising 2.47% at closing time, with 49,633 points.

    The positive climate was helped by mining giant Vale's stocks, which went up about 6%, as well as by Brazil's steel industry companies.

    The volume traded at Bovespa surpassed 6,2 billion Brazilian reais (US$ 3.48 billion), which was the Brazilian market's average early this year.

    The dollar followed the international trend and for the eight consecutive trading session closed higher. With this the Brazilian real has lost all the gain made this year in relation to the American currency. The dollar, after Wednesday's 0.68% increase, went up to 1.785 reais.

    Mercopress/Bzz

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