The Brazilian economy is expected to expand 4% in 2009 as oil exploration bolsters investment even as the United States and European Union slowdown hamper global growth, according to the country's Planning Minister Paulo Bernardo.
Investment from oil exploration in the pre-salt region, which runs along Brazil's coast from Espírito Santo to Santa Catarina, will boost growth, Bernardo said in an interview published on Sunday by daily Folha de S. Paulo.
A worsening of the economy in the US, which is holding presidential elections in November, and a slowing of the Euro zone are the only things that could slow the growth of Brazil's economy argued Bernardo.
"The next US president will have to define an exit strategy in Iraq, strengthen the dollar, recover the housing market and reduce the twin deficit," Bernardo told Folha, adding that "next year there will be changes over in the north, but we don't know their intensity, and this is the only thing that can hinder us."
Bernardo admitted that a prolonged "recession" in United States which is Brazil's biggest trading partner, may slow growth to 3.5%.
A year ago the country's energy giant Petrobras announced it had found five to eight billion barrels of light crude deep beneath the ocean floor in the Santos basin, the world's second-biggest oil find in the last 20 years.
Just last week, Petrobras estimated that another nearby deep-sea field holds between three and four billion barrels of oil and natural gas. Together, the two finds could lift Brazil's proven reserves by 85%, and that may be just the tip of the iceberg.
Some analysts estimate that 50 to 80 billion barrels of oil may lie deep below a thick layer of salt under the seabed along an 800 kilometer stretch off Brazil's southern coast. The development of this resource is expected to boost the Brazilian economy and make it one of world's top producers and exporters of oil.
Precisely last Friday Brazil deployed warships, fighter jets and thousands of troops off its southern coast starting two weeks of military exercises aimed at showing the world it can defend vast new oil reserves.
The exercise, "Operation Atlantic," will simulate an attack by a fictitious enemy on oil platforms and pipelines both on and off shore along the coastline of the states of Rio de Janeiro, São Paulo and Espírito Santo.
"This is an exercise that is intended to dissuade, a show of force," said Admiral Edlander Santos, the commander of the operation. Over the next two weeks, 10,000 troops, as many as 50 fighter jets, 17 ships and at least one submarine will be mobilized for the exercise, which will cost about US$ 12 million to stage.