São Paulo - Minister of Finance, Antonio Palocci, says that Brazilian growth is stronger than expected. Market analysts have forecast GDP growth of 3.5% for the year.

Accoring to Palocci, it is a rise in domestic consumption that is making the difference this year. "Easier credit, following a reduction in interest rates, has ensured a surge in sales of durable goods, mainly furniture and home appliances," said the minister.

Palocci went on to say that increased consumption resulted in the creation of one million jobs - legal, registered, on-the-books jobs - in the first half, along with a recovery of wages.

The minister said that the path to sustainable growth also consisted of more exports characterized by the effort to open new markets and cut the red tape for exporters.

Palocci called the Brazilian situation unusual: "We have GDP growth, controlled inflation, surpluses in our foreign accounts and a balanced budget."

Agência Brasil
Reporter: Liésio Pereira
Translator: Allen Bennett
07/28/2004