Brazilian economy grows 4.3 pct in first quarter

14 June 2007

Brasilia, Brazil, 14 June – The Brazilian economy grew 4.3 percent in the first quarter of this year, against the same period of 2006, to 596.2 billion reals, Brazil’s Geographical and Statistics Institute (IBGE) said Wednesday in Brasilia.

In relation to the last quarter of last year, the Gross Domestic Product (GDP) saw growth of 0.8 percent, meeting market expectations, also according to the IBGE.

The result was mainly influenced by the expansion of the services sector, which grew 1.7 percent against the final quarter of 2006, driven by increased salaries and employment in Brazil.

Industry saw a slight rise of 0.3 percent, while farming fell 2.4 percent.

In comparison with the first period of last year, the expansion of the services sector was 4.6 percent, and industry and farming saw rises of 3 percent and 2.1 percent, respectively.

The rise in GDP was not higher in the first quarter of 2007, according to analysts, because of the increased value of the real, as the fall of the dollar stimulates the acquisition of imports and has a limiting effect on Brazilian industry.

Analysts believe that growth of the Brazilian economy this year will be around 4.2 percent against a government forecast of 4.5 percent. (macauhub)