Brazil to grow more than expected in 2006

Until last week, the Brazilian government estimated annual expansion to be in the range of 4% in 2006.  However, growth is expected to pick up further during the second half of the year, following “a moderate expansion in the first half, January-June”, admitted Mantega.

Economic growth during the rest of 2006 is expected to be boosted by the rise in the minimum wage that took effect in April, higher public and private investment and solid industrial output:  The increase in profitability of certain major Brazilian companies (eg. Unibanco, Brazil’s private sector bank and Eletropaulo, power distributors) as well as the successful expansion of international companies in Brazil (eg. Arclor and InBev, the world’s largest beer producer) further boost the economic prospects of the country, also bringing a positive effect to real estate investments.  Furthermore, Spanish and Portuguese developers and major hotel and resort groups have now arrived in Brazil and are investing millions of euros in tourist developments aimed at the European market.

Brazil's GDP expanded by 1.4% in the first quarter of this year, and it is predicted that growth will continue at an average of between 1.3% and 1.5% for the remaining quarters, to total the 4.5% target.  Needless to say, opportunity for timely investments in Brazil now remains stronger than ever before.