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Brazilians’ Buying Spree Yanked Brazil Out of Recession

Brazilian families' consumption has been the main reason behind the return to growth of Brazil. Influenced by the lower tax burden on goods and by the greater offer of credit and higher salaries, families spent 2.1% more in the second quarter of 2009 than in the first three months of this year, boosting the 1.9% expansion of the Gross Domestic Product (GDP) of Brazil in the period.

According to figures disclosed by the Brazilian Institute of Geography and Statistics (IBGE), families spent around 470 billion Brazilian reais (US$ 257 billion) in the period. In comparison with the result for the second quarter of 2008, family consumption has grown 3.2%, the 23rd period of growth running.

"Family consumption has never stopped growing, but the rate of growth has been decelerating. This makes the difference, as this is the component that most influences the GDP," explained IBGE economist Rebeca Palis, on pointing out the 3.3% expansion in wages in the second quarter of 2009 and the 20.3% growth in credit granted to natural people.

With growth of 1.9% from one quarter to the next, the GDP interrupts a trajectory of contraction, called a technical recession by some. In the first quarter, the contraction was 1% and in the last quarter of 2008, 3.4%.

For this growth, the IBGE also points out the first positive contribution in the foreign sector since 2005, with exports growing more than imports (14.1% against 1.5%, respectively), apart from 2.1% industrial growth.

"Part of what is consumed in the country is imported. Family consumption does not include only national products, but also imported ones," added Rebeca.

According to the IBGE, a negative factor contributing to the GDP was the stability of the level of investment in the country from one quarter to the other, due to the lower imports of machinery and equipment.

In the period, the government also spent less (0.1%). And the agricultural sector, influenced by climate products, had negative variation of 0.1%.

ABr

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