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Thursday 10th of June 2010
June 8, 2010    

Brazil’s economy expands 9% on year

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by Kay Murchie

Brazil’s economy, which is the biggest in Latin America, has posted growth of 9% in the first three months of 2010, compared with the same period a year earlier.

The annual growth, which grew at the fastest rate since 1996, was boosted by capital spending and industrial growth, according to official figures from the Government’s statistics agency IBGE.

Meanwhile, the economy which is the world’s eighth largest, grew by 2.7% on the previous three months - exceeding analysts’ expectations.

Sectors posting strong growth include capital spending, which grew 7.4% on a quarter-on-quarter basis. Industry reported 4.2% growth, while agriculture was up 2.7%.

Meanwhile, some analysts are concerned that the economy is overheating. However, higher interest rates and the withdrawal of some tax breaks should cool growth.

Pedro Tuesta, senior Latin America economist at research firm 4Cast Inc. comments, “These figures are confirmation of what the market was talking about, a strong first quarter with very strong domestic demand despite the weak external sector.”

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