Government Will Contribute Only 14% to Brazil’s US$ 240 Bi Investment Package

Brazil's president Lula da Silva unveiled on January 22 an economic package with the purpose of boosting growth to 5% annually by 2008 through a combination of public and private spending.

"The challenge now is to accelerate economic growth," said Lula, who was put on the defensive during his reelection campaign last year for slow Brazilian economic expansion that lagged behind the rest of Latin America.

The plan unveiled calls for more than US$ 240 billion through 2010 to repair and build highways, boost electric power generation, expand ports and airports and provide housing and water and sewage service for needy Brazilians.

About US$ 34 billion would be provided by the government and the rest would come from the private sector. Lula da Silva's administration is also planning legislation to give business big tax breaks to participate in the projects.

Brazil will try to bring down government debt by linking increases in government salaries and the national minimum wage to the inflation rate plus no more than 1.5%.

Lula da Silva said that he expects Brazil's economy to expand 4.5% this year, and that the economic package will help boost GDP growth to 5% in 2008 through 2010.

Experts and multilateral organizations believe South America's largest economy will grow only 3.5% this year after estimated 2.8% growth in 2006.

However a pending chapter of the proposal was the private's sector demand for tax and labor law reform and interest rates.

Lula da Silva's administration imposed high interest rates during his first term that brought inflation down to less than 4% and helped eliminate the country's typical boom-and-bust economic cycles.

But the rate also contained growth by making borrowing for businesses extremely expensive and the appreciation of Brazil's currency against the US dollar has hurt sectors of the economy exporters and manufacturers for the domestic market because goods from abroad are often cheaper.

The benchmark Selic rate currently stands at 13.25% with inflation in the range of 4%.

Mercopress

Tags:

You May Also Like

To Not Save Uncontacted Brazilian Indians Is Genocide, Says Survival

A small tribe of uncontacted Indians in the Brazilian Amazon is facing annihilation as ...

RAPIDINHAS

There are elected members of Brazil’s Congress who spent heavily to win a seat, ...

Brazil Loses What Many Consider Its Best Contemporary Novelist

Brazilian writer João Ubaldo Ribeiro, 73 years old, died today, from pulmonary embolism, at ...

Brazil: A Tale of Two Lulas

Brazil’s financial team has been reeling. And last week, President Lula took his team ...

New Pictures in Brazilian Jungle Show Tribe of Uncontacted Indians

The movement for tribal peoples Survival International has been divulging pictures taken by Brazil’s ...

UN Says Death of Brazilian General in Haiti Does Not Change Peace Mission

The director of the United Nations (UN) Information Center in Brazil, Carlos dos Santos, ...

Miami Gets Its Children’s Day, the Brazilian Way

Children's Day (Dia das Crianças) was created in the early 1920s in Brazil by ...

Communist Party Should Lose Control of Brazil’s Sports Ministry After Corruption Scandal

Brazil’s Sports minister, Orlando Silva, during testimony that lasted more than three hours, denied ...

Pure Fantasy, Says Brazil Government to Charges of Cuba Interference in the Elections

"As on other occasions, the speculations published in the weekly magazine Veja, distributed on ...

Seu Lunga: This Brazilian Celebrity Won’t Forgive a Stupid Question

Going through a text about the Turkish folktales of Nasredin Hodja with one of ...