The announcement by the Brazil’s statistics bureau, the IBGE, that the Brazilian GDP growth dropped 1.2% in the third quarter, compared to the second quarter was a big shock to the experts in economy.
Miguel José Ribeiro de Oliveira, vice president of the trade association of financial executives, administrators and accountants (Associação Nacional dos Executivos de Finanças, Administração e Contabilidade) (Anefac), declared that the market was expecting bad news, but not that bad.
"When the IBGE announced a negative number it really had a negative effect," said Oliveira.
"It shows that the high interest rates are punishing the industrial sector," he said, adding that the interest rate is more than reasonably high to have caused such a harsh drop in economic activity.
The good news was that there was third quarter GDP growth: it was up 1% compared to the same period in 2004.
Bonus Global 2034
Brazil raised US$ 500 million on Tuesday, November 29, with another offering of government bonds that mature in 2034, known as Bonus Global 2034.
This follows a US$ 1.5 billion emission made in January 2004, and an emission of US$ 500 million in May of this year.
The emission was led by Merrill Lynch and Barclays Capital. The bonds got 99.325% of face value with a yield of 8.311%. Interest payments on these bonds are made every six months.