Brazil’s economy to grow 4.9 pct in 2006, says minister

26 December 2005

Brasilia, Brazil, 26 Dec – Brazil’s GDP will increase by 4.9 percent next year, the same rate as recorded in 2004, Finance Minister Antonio Palocci has said.

Giving an appraisal Saturday of Brazil’s economic performance for the year, Palocci said the scenario for 2006 was very similar to those of 2003 and 2004, although the same indicators were accompanied by better conditions.

Conditions exist for economic growth, added the minister, with low inflation (5.5 percent in 2005), balanced foreign trade, real growth in salaries and increasingly better investment conditions.

After booming in 2004, the Brazilian economy cooled down this year and the government predicts GDP growth of 2.5 percent for 2005.

Brazil’s central bank initially forecast growth of 3.4 percent for this year, but third-quarter shrinkage of GDP by 1.2 percent caused the government to revise its prediction.

High interest rates, identified by the government as the cause for falling GDP growth, will continue to be gradually lowered, added Brazil’s finance minister. (macauhub)