• Categories
  • Archives

Upbeat Finance Minister Sees Brazil Growing 5% in 2006

Latin American stocks were mixed, with Brazilian stocks extending yesterday’s losses in light trading ahead of the Christmas holiday. Meanwhile, Mexican shares climbed, as investors were cheered by upbeat reports on U.S. durable goods and consumer sentiment.

Brazil’s Bovespa Index dropped 181.60 points, or 0.54%. Mexico’s benchmark Bolsa Index added 33.38 points, or 0.19%, while Argentina’s Merval Index rose 12.88 points, or 0.85%.

Brazilian stocks slumped again today, as investors continued taking some profits following recent strong gains on optimism about the economy and interest rates.

Finance Minister Antonio Palocci said today that declining interest rates and improved investor sentiment will help 2006 economic growth repeat its performance from 2004, when the economy expanded 4.9%.

"The conditions for strong growth are there. I believe the scenario for that is being created for 2006 is very close to that seen in 2003 and 2004," he said.

Palocci also cited low inflation, improved sovereign debt risk, a growing foreign trade surplus, improving consumer income, and growing domestic credit and sales as indications of solid economic growth next year.

Recent central bank surveys have given a less optimistic outlook, however, for growth of 3.5% in 2006.

In economic data, the central bank said Brazil’s November primary budget surplus was 3.55 billion Brazilian reais, down from 8.55 billion reais in October. The year-to-date surplus was 96.8 billion reais, which represents 5.58% of gross domestic product.

On the corporate front, steelmaker Arcelor Brasil made its trading debut on the Brazilian Stock Exchange. Arcelor Brasil is the holding company for No. 2 global steelmaker Arcelor’s Brazilian assets.

Low-cost airline Gol announced a further move into the South American market, saying it will offer flights to the Argentine cities of Cordoba and Rosario in early January.

Mining company Companhia Vale do Rio Doce confirmed that it is negotiating its entry into the controlling group of shareholders at steelmaker Usinas Siderúrgicas de Minas Gerais.

Mexican issues edged higher in light holiday trading. U.S. shares showed similar limited movement, but some upbeat U.S. economic data boosted Mexico, which sends the vast majority of exports across the border.

New orders for U.S.-made durable goods increased 4.4% in November to a record high level of $223 billion. Meanwhile, the University of Michigan’s December consumer sentiment survey came in with a reading of 91.5, well above forecasts.

In corporate reports, Pemex’s chief executive said the firm hopes to sell shares on the local stock market in 2006, if a proposal to grant the state-run firm autonomy is approved by Congress.

Argentine trading, meanwhile, was strongly positive. Last night, the Senate approved the government’s budget for 2006. The budget assumes inflation at 10% and sets spending at US$ 31 billion. Economic expansion is forecast at 4%.

Thomson Financial Corporate Group – www.thomsonfinancial.com

Tags:

  • Show Comments (1)

  • Guest

    What was Paloccci predictions…..
    …for 2005 growth :

    – at end of 2004 ?
    – early 2005 ?
    – mid 2005 ?
    – October 2005 ?

    ALL WRONG AS USUAL ! SIMPLE !

    Why could he then be more correct for 2006 ?

    Predicting rosy growth rates only helps him hide his own mistakes, mismanagement and failures.

    Facts are that Brazil grew far less than most developing countries since 2003, date Lula and his gang took power.
    Facts are that corruption is actually at the maximum ever.
    Their promises have never been fulffiled and never will be !

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Agrarian Reform Now! Land Concentration Dehumanizes Brazil

The concentration of land in Brazil continues to be among the highest in the ...

Brazil Reduces Growth Forecast in Half to 0.9%

For the third quarter in a row, the economic staff has reduced the official ...

Cultural Potpourri

It is so rare to see Portuguese-language poems translated into English and published in ...

Itaíº Doubles Profit to US$ 4.8 Bi Becoming Brazil’s Most Profitable Bank

Brazil's Itaú bank obtained record profits of 8.474 billion Brazilian reais (US$ 4.8 billion) ...

Brazil’s Minimum Wage: Government and Unions Adopt Hard Line on Negotiations

Brazil’s labor Union Força Sindical says it will insist on a minimum wage of ...

Beautiful Beat: Brazil’s Batuka! Brasil Is Back Bolder and Broader than Before

Since its 1st edition, in 1996, the Batuka! Brasil took place every year until ...

Brazil’s Fair Shows the Latest in War Products from Around the World

Delegations from 65 countries some of them including Defense ministers were in Rio, Brazil, ...

Brazil Protests and Family Calls Shameful UK Decision on De Menezes

Brazil regretted Monday, July 17, the British prosecutors decision not to charge the police ...

The Land of the Sphinx Is Luring Brazilian Soccer Players

Rogério Dantas, a 23-year-old native of the southeastern Brazilian state of São Paulo, arrived ...