Brazilian Growth Outstrips Forecast

Brazil’s economy grew at an annualised rate of 8.9 per cent in the first half of 2010, defying expectations of a more significant slowdown in the second quarter and signalling that the country may beat its previous forecast of 7 per cent growth for the year., Bloomberg 9/6/2010 11:06:43 PM

Gross domestic product expanded 1.2 per cent from the first quarter while most economists had expected just 0.6 to 0.8 per cent. The first three months of the year saw a burst of growth at 2.7 per cent on a quarterly basis.

Consumer demand rose 0.8 percent from the previous quarter, while government spending rose 2.1 percent. Investment expanded 2.4 percent from the previous quarter and 26.5 percent from a year ago, the biggest jump since the series began in 1996.

Imports jumped 38.8 percent from a year ago, five times the 7.3 percent increase in exports, as consumers took advantage of a strong currency to travel and increase purchases abroad.

Slower growth in the second quarter came after industrial output fell from the first three months of the year, and vehicle sales slumped 21.5 percent in April from the previous month after tax breaks expired.

Brazil’s consumer prices unexpectedly fell last month, taking the annual inflation rate to 4.44 percent through mid- August, below the government’s 4.5 percent target for the first time since January.

Brazilian Growth Outstrips Forecast