Rio - Industrial production in Brazil grew 0.5% in July, the fifth consecutive month of growth this year. The cumulative rate for seven months is 7.8%, higher than the result for the first semester (7.5%). Compared with July, 2003, the overall increase in industrial production amounts to 9.6%, and the overall rate for the previous 12-month period rose from 3.9% in June to 5.0% in July. These figures, released yesterday (9) by the Brazilian Institute of Geography and Statistics (IBGE), represent the best performance by the industrial sector since 2002.

For the IBGE's coordinator of Industry, Sílvio Salles, these numbers continue to show the positive effects of growth in the production of durable consumer goods, especially vehicles, and capital goods (machinery and equipment), as well as the impetus of exports. Salles underlined that the production of semi-durable and non-durable consumer goods, more sensitive to the evolution of workers' wages, is also experiencing a recovery, albeit "in a much more moderate form."

For the IBGE economist, expectations that the benchmark interest rate (Selic) will be raised next week should have an impact on installment purchases. "If there is going to be an interest rate increase, it is because prices are going up, and I think this could be a troublesome factor for the general business atmosphere," he said.

Agência Brasil
Reporter: Cristiane Ribeiro
Translator: David Silberstein
09/10/2004