Brazil’s Central Bank Projecting 4.8% Growth for Country

Petrobras refinery in Rio de Janeiro, Brazil The Central Bank of Brazil is maintaining its growth forecast for the Gross Domestic Product (GDP), this years, at 4.8%. The estimate was taken from the Quarterly Inflation Report, disclosed this Thursday, June 25, by that financial institution. The previous report came out in March.

The bank's projection is based on the assumption that Brazil's basic interest rate (Special Settlement and Custody System (SELIC ) overnight rate) will remain at 12.25% per year, and that the exchange rate for the dollar will continue to be at 1.65 real per one dollar.

This year, the Selic was readjusted up by half a percentage point in each of the two meetings held by the Monetary Policy Committee (Copom).

Oil Refining

Oil refinement ranked first in the list of five main industrial activities in Brazil in 2006, with a production of 107.14 billion reais (US$ 66.7 billion) and sales of 99.53 billion reais (US$ 62 billion).

Next comes automobile, light truck and utilitarian vehicle manufacturing activities; iron ore extraction, slaughtering of animals and preparation of meat products, and production of steel laminates. The data were culled from the Annual Industrial Survey-Product (PIA-Produto), disclosed June 25 by the Brazilian Institute of Geography and Statistics (IBGE).

Production and sales by the automobile industry in 2006 stood at 68.30 billion reais (US$ 42.5 billion) and 55.74 billion reais (US$ 34.7 billion), respectively. Extraction of iron ore reached 34.63 billion reais (US$ 21.5 billion) and 26.16 billion reais (US$ 16.3 billion).

The animal slaughtering sector generated 30.16 billion reais (US$ 18.7 billion) in production and 24.38 billion reais (US$ 14.6 billion) in sales; and the figures for the laminated aluminum sector stood at 23.04 billion reais (US$ 14.3 billion) and 23.39 billion reais (US$ 14.5 billion).

Also with regard to production value, the list of the ten leading industrial activities developed in 2006 includes sugar plants (20.83 billion reais or US$ 12.9 billion), thermoplastic resins manufacturing (19.62 billion reais or US$ 12.2 billion), production of medication for human use (19.24 billion reais or US$ 11.9 billion), manufacturing of lorries and buses (18.65 billion reais or US$ 11.6 billion) and aluminum manufacturing (18.09 billion reais or US$ 11.2 billion).

The survey universe was comprised of 34,500 companies with 43,000 local units, i.e., industrial plants. In all, 3,500 products were surveyed, with sales totaling 1.117 trillion reais (US$ 696.1 billion) in 2006, the equivalent to 90% of industrial sales in the country. The manager at the survey, João Batista de Oliveira, explained that the universe of PIA-Produto only includes companies with at least 30 employees.

According to Oliveira, in the list of leading states for sales of industrial products and/or services "the state of São Paulo still ranks first. Of those US$ 696.1 billion, São Paulo answered to 41.5% in sales in 2006." Next come the states of Minas Gerais (10.4%); Rio Grande do Sul (8%), Paraná and Rio de Janeiro (7.3% each), Bahia (5.2%), Amazonas (4.3%), Santa Catarina (3.9%) and Espí­rito Santo (2.3%). "We take under consideration the states whose participation was greater than 2%," explained the researcher at the IBGE.

The fact that a large number of industries are located in São Paulo explains, to a large extent, the concentration of sales in the state, as the manager at PIA-Produto explains. "São Paulo earns one of the largest pieces of the pie due to its economical situation. There are industries throughout the entire territory in the state."

The IBGE is already collecting information for the 2007 PIA-Product survey, stated Oliveira.

ABr

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