All Sectors Up: For Brazil Minister, Crisis Only in the Rearview Mirror

Brazilians buying clothes The minister of Development, Industry and Foreign Trade of Brazil, Miguel Jorge, said today that all sectors of the economy have already left the crisis behind. He talked to journalists upon leaving a meeting of the Crisis Follow-Up Group, at the Ministry of Finance.

According to the minister, credit is no longer the greatest concern among businessmen. Instead, he declared, the issues under discussion were exports and exchange rates.

"If we have gone back to discussing these matters, it is a sign that the worst of the crisis has passed. These issues were already being discussed before the crisis," he said.

According to Miguel Jorge, the crisis has ceased to affect all sectors of the industry. "Some sectors are doing better than others, but the crisis is not a problem anymore."

Consumer Confidence

Brazilian consumers are more confident in the economy. In July, the Consumer Confidence Index, measured by the São Paulo Trade Association (ACSP), rose by three points compared with June, having gone from 123 to 126 points.

"The confidence is returning, credit is irrigating the economy once again, and the outlook for the second half, which was already good, is being confirmed by the surveys," said the president of the ACSP, Alencar Burti, in a press release.

Last month, the number of consumers who felt safer in their jobs (38% of interviewees) was greater than in June, when 33% claimed to feel safe. The survey also showed optimism with regard to purchases. In July, 42% stated that they were more prone to purchasing household appliances, as against 38% in June.

With regard to installments, the average figure in July was 70 Brazilian reais (US$ 38), as against 85 reais (US$ 46) in June, which showed that consumers are still cautious. In turn, consumer confidence in the future of the economy in their respective regions, in July, showed increase for 39% of interviewees, as against 36% in June. Consumers also displayed optimism concerning the improvement of their personal financial situations.

According to the ACSP, the index is measured by means of 1,000 household surveys in nine different metropolitan regions and 70 different cities in the interior of Brazil.

Foreign Currency Surplus

The sum of dollar inflow and outflow in Brazil yielded a positive result of US$ 2.255 billion from the 1st to the 7th of August, with five business days. In the same period last year, the flow of foreign currency was positive by US$ 2.178 billion. The data was disclosed by the Brazilian Central Bank.

The result was mainly driven by investment in bonds, remittance of profits and dividends to foreign countries, and foreign direct investment, among other operations, which ran a surplus of US$ 2.696 billion, whereas trade operations (export and import contracts) recorded a deficit of US$ 441 million.

In the accumulated result from January until August 7th, the sum of dollar inflow and outflow is US$ 6.19 billion, as against US$ 14.618 billion in the same period of 2008. From January until early this month, the sum of dollar inflow and outflow ran a deficit of US$ 3.364 billion, and a trade surplus of US$ 9.554 was recorded.

The Central Bank also informed that in the first week of August, it purchased a total of US$ 779 million. The dollars purchased become part of the country's foreign exchange reserves.

ABr

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