Brazil Economy’s Poor Showing Doesn’t Hurt Lula’s Mood or Popularity

Brazilian President Luiz Inácio Lula da Silva forecasted Friday the economy would expand 4% by the end of 2006 in spite of poor quarterly results.

The Brazilian Institute of Geography and Statistics, IBGE, reported Thursday that Brazil’s GDP grew 0.5% from the first quarter, slowing from a 1.3% expansion in the first three months of the year in part because of falling exports.

Brazil’s export sector slumped 5.1% in the second quarter from the first three months of the year, the first decline after 12 consecutive quarters of expansion.

"I had the opportunity to see the IBGE information and it is within what we had forecasted, that is to say we have a growth target of 4%," Lula told reporters after participating in a meeting with executives of Italian automaker Fiat.

According to President Lula, who is seeking a second four-year term in the October 1st elections, there are "many people scared" with the tepid GDP growth in the second quarter, but "they forget that two quarters are left for the economy to get back on course".

"We’re convinced that we’ll reach the 4% goal that we have set as our aim. We’re going to achieve the goal of getting Brazil into a lasting cycle of growth, which is what indeed is necessary," insisted the president.

However financial analysts are not so confident and believe that given second quarter results it will be difficult, but not impossible, to meet the 4% government target.

The Brazilian economy last year also experienced a modest growth, 2.3% but the Lula da Silva administration preferred to react unconcerned about recent economic data and expressed optimism looking into the future.

"I feel very good about growth prospects for Brazil’s economy; I feel good about the prospects for growth in industrial output; I feel good about growth in the auto industry," the president said.

But the fact is that the strong Brazilian currency, real, caused the first decline in export volumes in almost three years, helping slow down Latin America’s largest economy, according to official data last week.

Exporters have complained that the strong real reduces their proceeds from external sales and the competitiveness of their products. But analysts say the currency effect on the trade surplus so far is being masked by high prices for some key products, which are increasing the value of exports.

Nevertheless President Lula’s optimism seems to have caught with the Brazilian electorate because with only a month left for ballot day, public opinion surveys show him with over 50% of vote intention and 25 points ahead of his runner up, Geraldo Alckmin from the Social Democrat party. Socialist candidate Senator Heloí­sa Helena has stabilized in 12%.

The same Vox Populi survey a month ago showed Lula da Silva with 45% of vote intention and former São Paulo governor Alckmin with 24%.

Mercopress

Tags:

  • Show Comments (1)

  • ch.c.

    Basta Lula !!!!!
    Everyone could just as well scroll down on these news and find out Lula estimates for your 2005 growth rate while the year developed.
    They were ALL the time far above the reality.

    Thus either he lies openly or this guy is really stupid.

    In view of his economic performances, saying he is stupid is more appropriate…….since your growth rate was AND is the worst of all developing countries on this planet.

    In fact he is so stupid that he is proud of his achievements.

    Funny, isnt it ?

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil’s Community Pharmacies Sell Drugs Up to 90% Cheaper

By the end of this year, the Ministry of Health is expected to inaugurate ...

José Condé’s A Velha Senhora Magdala – In Portuguese

Tears came to her eyes. She felt a little dizzy, and she didn’t know ...

Nigeria Backs Brazil for WTO Presidency

Brazil received yesterday a thumbs-up sign regarding its candidacy for the presidency of the ...

100 Days of Lula and No Cardoso

Former President Fernando Henrique Cardoso treated the audience, which had paid a lot of ...

US-based GXS Buys Brazil’s Interchange, a B2B E-commerce Firm

Interchange Serviços S.A., one of Brazil's largest, in-country providers of electronic data interchange (EDI) ...

Brazilian Women Earn 30% Less than Men

The number of employed women rose in Brazil, but their salaries have not followed ...

Brazil’s Lula Excited With Addition of Biofuel to Diesel

With the production of H-Bio, consumers may be able to pay less for diesel ...

Agriculture Leads 6th Month of Job Growth in Brazil

The level of formal employment in Brazil rose for the sixth straight month, as ...

Floating Exchange Rate Is Here to Stay, Says Brazilian President

Nelson Barbosa, the executive secretary of Brazil’s Ministry of Finances, speaking at a seminar ...