High Taxes and Interest Slow Brazil Industry Output

Industrial production in Brazil grew in the final quarter of 2004 (October-December), but at a slower pace than in the previous quarter (July-September).

In comparison with the final quarter of 2003, however, the production growth rate represented an improvement. The level of new job offers remained unchanged, since industries continued to hire more workers.


These data appear in the National Confederation of Industry’s (CNI) industrial survey. According to the study, the CNI’s index of industrial production registered 57.6 points in the final quarter of 2004.


In the third quarter it stood at 59.9, and in the final quarter of 2003, 54.3. The index ranges from 0 to 100. Figures above 50 points are indicative of a positive trend.


Regarding the level of job offers, the study shows that, although industry hired new workers in the final quarter of 2004 (index of 54.0), the pace was inferior to that of the previous quarter (55.6). The index stood at 50.1 in the final quarter of 2003.


Industrial earnings also rose in the final quarter of last year (index of 58.2), but, again, at a slower pace than in the third quarter (59.9). In the final quarter of 2003, the index registered 54.1.


The chief problems in the final quarter of 2004, as identified by the industries that were surveyed, were the heavy tax burden and high interest rates.


The industrial survey for the final quarter of 2004 was conducted with 1,214 small and medium-sized firms and 199 large companies, during the period January 4-25, 2005.


Translation: David Silberstein
Agência Brasil

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