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Not Promise But Guarantee from Lula: All Will Be Better in Brazil, in 2006

Brazilian President Luiz Inácio Lula da Silva "ensured" Monday that the Brazilian economy will grow even more in 2006, in spite of general and presidential elections. However, market forecasts are not so enthusiastic.

"I’m not promising, I’m guaranteeing the Brazilian people that Brazil will develop much more in 2006, with a more vigorous and more solid expansion," said President Lula in his last radio program of the year.

"I believe 2006 will be exactly what I’m telling you, a year in which industry will grow more, employment will increase, incomes will increase and I’m sure everything is going to be better in 2006," he added.

But private analysts are not so convinced following the deceleration of the third quarter, which has led them to downgrade growth estimates for 2005 from 3% to 2.5%, and 3,5% for next year, according to the Central Bank monthly poll among the leading businesses of the country.

Finance Minister Antonio Palocci stated Friday that the Brazilian economy is poised to expand 5% in 2006.

Mr. Lula has insisted that although 2006 is an election year, "elections can’t become an obstacle, should not become an obstacle, will not become an obstacle" for the government development plans.

"Obviously we’ll have a political dispute which always generates much discussion but I think the role of the president is to ensure that politics don’t dominate the daily management of government or the country’s development".

President Lula has still to announce if he will be running for re-election. His popularity has suffered severely following revelations of a network of illegal payments orchestrated by his Workers Party to buy support in Congress for the government’s legislative agenda.

President Lula insisted that Brazil is now a country with international credibility, "with its books in order" and with the necessary robustness "to cancel in advance its debts with the International Monetary Fund".

"We’re making decisions with no interference from the IMF or any other multilateral organization," he highlighted.

The latest Central Bank poll also indicates that business leaders expect lower interests since the reference rate began a steady four months slide last September from 19.75% to the current 18% and hopes of a further cut in January to 17.5%, probably ending 2006 at 15%.

But economic agents also believe that foreign direct investment in Brazil will remain stabilized in US$ 15 billion both in 2005 and 2006, contrary to earlier forecasts in excess of US$ 16 billion.

Mercopress – www.mercopress.com

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  • Guest

    Lula has been in government for just 3 years and has already succeed to reinsert Brazil in the way to development. INFLATION is well controlled in a 5% year rate; EMPLOYMENT rate is rising up slowly, but regularly ”“ 4,5 million new jobs has already been created by Lula’s Government; FOREIGN DEBT being honored and corresponds now to 1.4 times the country’s GDP, 3 years ago it was as high as 4.4 times the GDP! ”“ also the country has fully repaid IMF in advance; FOREIGN TRADE performing exceptional results – in 2005 hit an astonishing US$44 billion trade surplus; Healthy INTERNATIONAL RESERVES valued U$57 billion – the highest ever registered; FISCAL POLICY is highly responsible, recording annual surplus of 5.6% in the domestic accounts, pushing down the domestic debt (unfortunately in the previous government the debit skyrocketed out of control ”“ Mr. Fernando H. Cardoso’s rule was a nightmare of irresponsibility to Brazil…)

    Besides the optimistic economical figures, the social policy in Brazil has being effective and its results also starts to show up: for the first time in oficial statistical historical series the abyssal income difference between richest and poorest population started to decrease.

  • Guest

    ??????
    – grow more than WHAT ? Silence……or censured…..!!!!!!

    – If it is from zero, this is not much.
    – If it it from 2005 overall, still not much.
    – If it is from last quarter, still negative growth.

    During the past 3 years, the guarantees and promises of Lula, the brazilian GDP growth rate has on the queue of the developing nations growth.

    This is a fact, not a promise and not a guarantee. Numbers speak by themselves.
    Statistics, when not trunked by Lula’s gang, are better than all their words mixed with lies.

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