On June 8th Brazil announced that its first quarter GDP for 2010 had grown by 9%. This was greater than the 4.5% which most analysts expected. This is more growth than the country has seen in over two decades!
Unlike the world’s top economy, the US, Brazil’s manufacturing sector and its exports to China are growing. This has had a partially negative effect in the inflation department as the inflation rate reached 5.2%, which is higher than the government target of 4.5%. However to prevent the economy from overheating Brazil’s central bank raised interest rates to 10.25%.
There is still a fear that the US could go into another contraction and the weak growth in Europe isn’t encouraging for most people looking to invest in Brazilian stocks. The United States is Brazil’s main importer of soy beans, coffee and iron ore and a fall in purchases from the US could slow down Brazilian growth. Despite this Brazil has been expanding their horizons with China and India becoming consistent trading partners.
In July Brazil added 181,000 jobs, which brought the total to 1.7 million jobs in the last seven months alone! That’s a lot of jobs if the fact that Brazil has a population of 190 million people is taken into account.
Clearly now is a great time for an investor to looking into buying Brazilian stocks.
Forestry Update is sponsored by Greenwood Management. visit Greenwood at there website