Brazil Industry Falls 1.7%, Car Sales Drop 26%

zzz Industrial production in Brazil fell in October as the global financial meltdown sent shock waves through Latin America's largest economy, the government said Tuesday, November 2. It was the largest drop since December 2006.

Industrial production slid 1.7% for the month compared to September, according to the statistics agency, known as IBGE. The hardest hit sectors were the chemicals industry, petroleum and ethanol production and machinery and equipment manufacturing.

Brazil automakers also suffered a 26% decline in November sales, continuing a trend that started last month as credit costs increase, according to the National Vehicle Dealership Association, Fenabrave.

The IBGE report said that industrial production for October expanded 0.8% over the same month last year.

Economists predict that Brazil's economy will expand 2.8% next year, down from forecasts of about 4% before the financial crisis hit. Analysts believe the economy will expand 5.2% this year.

Finance Minister Guido Mantega insisted Tuesday that Brazil is not headed toward a recession, but acknowledged Brazil's recently booming economy has been decelerating due to the global economic crisis.

He said that Brazilian economic growth would be less than 3% next year, but did not offer a more precise figure.

Fenabrave said that sales in November totaled 166,279 units compared with 224,744 units in October and 225,750 units in November of 2007.

Fenabrave's numbers serve as a sign of things to come this Thursday when the Brazilian Motor Vehicle Manufacturers Association, or Anfavea, releases its month-ending sales figures. Anfavea data is considered the benchmark for the industry.

Brazilian car sales had been rising all year but quickly reversed course in late September when banks raised interest rates and shortened term payments for new and used car loans. Banks have been more cautious about bringing on new loans in response to the ongoing global credit crisis.

Nevertheless, 2008 will be a banner year for the top three international automakers in Brazil: Volkswagen AG, Fiat SpA and General Motors Corp. (GM). Sales this year have reached 2.4 million units which is 17.8% above the same period last year, according to Fenabrave.

Mercopress

Tags:

You May Also Like

The Latest Minister Accused of Corruption in Brazil Is Close Friend of President Rousseff

Fernando Pimentel, Brazil’s Trade and Industry minister, is facing pressure to explain his personal ...

Brazil Shows Polarization Between Lula and Cardoso Parties

Brazilian historian, Robson Arrais, believes that the results of the just-finished Brazil’s 2004 elections signal ...

UN Urges Brazil to Stop Copying US in Racism Fight

This week one of Brazil’s chief partners in the fight against racial inequalities urged ...

Indignation Elected Lula in Brazil. But Nothing Changed.

Here’s a positive lesson to be taken from this almost always maladroit globalization concept: ...

Greenspan Inspires Investment in Brazil

Latin American stocks ended the session mixed to higher, as Brazilian equities climbed after ...

India rocket on launching pad

Left Behind, Brazil Talks Space Cooperation with India

Cooperation between Brazil and India in the space area was the theme of a ...

Five Million Kids Still Working in Brazil

Despite all the efforts by the Brazilian government to end child labor, there are ...

Peugeot Citroí«n Celebrating 9.5% Growth in Brazil

Peugeot Citroën Brazil was the Brazilian carmaker that presented the largest growth in 2005. ...

Iraq Wants Brazil Participation in Country’s Reconstruction Effort

Iraq is planning to build 3.5 million popular housing units in seven years and ...

Brazil’s Lula: Globalization of Justice Would End Terror

Speaking at the meeting of the World Commission on the Social Dimension of Globalization, ...