BRAZIL: GREATEST (ECONOMIC) HITS OF 2004

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E.O. 12958: N/A
TAGS: ECON BR
SUBJECT: BRAZIL: GREATEST (ECONOMIC) HITS OF 2004



1. Economically speaking, Brazil had an outstanding year in
2004, with the country by all accounts poised to embark upon
a path of continued, sustainable growth. Below we have set
forth a short list of the year's "greatest hits." While
there is more that the GOB needs to do sustain such growth
levels - including, for instance, improving the investment
and regulatory climate - to date, the GOB economic team has
put together an impressive string of achievements.


2. Begin List.

-- GDP expanded at a rate of 5 percent, the best result
since 1994.

-- Brazil is closing in on Mexico as the Latin American
country with the highest GDP (in dollar terms). According
to some private sector estimates, by the end of 2005
Brazilian GDP should stand reach US$634 billion - only $57
billion behind Mexico.

-- Between Dec. 2003/Nov. 2004, industrial production
surged 8.1 percent, the biggest increase since 1986.

-- Consumer price inflation (IPCA index) dropped to 7.6
percent, down from 9.3 percent in 2003.

-- The Brazilian economy generated 1.52 million formal
sector jobs in 2004, the highest total since the GOB
initiated this data series (in 1992).

-- 2004 saw a current account surplus of US$11.3 billion
and a record trade surplus of US$33.6 billion.

-- To the delight of international markets, the GOB raised
its primary surplus target (net revenues minus
expenditure/GDP) from 4.25 percent to 4.5 percent. With a
final primary surplus of 4.6 percent, Brazil not only met -
but exceeded - its revised target.

-- Net debt to GDP ratio declined from 57.2 percent to 52
percent, coming tantalizingly close to dropping below the 50
percent level - a sine qua non if Brazil is to acquire
investment grade status for its sovereign debt.

-- Moody's raised its outlook on Brazilian sovereign
external debt from stable to positive.

-- The Lula administration garnered congressional approval
of three of its key micro-reforms: a new bankruptcy law, a
public-private partnership regime, and a judicial
streamlining package.

-- Brazil is now the world's largest producer and exporter
of coffee, orange juice, iron ore and sugar; world's second
largest producer - and first largest exporter -- of
soybeans, beef, and chicken. Industrial production has kept
pace: Brazil is the world's fourth largest aircraft maker;
the world's eighth largest steel and software producer; and
world's eighth largest cell phone market.

-- Exports in 2004 reached an all-time record at US$ 96
billion, substantially over the GOB's original target of US$
73 billion.

-- In 2004, 865 new Brazilian companies - primarily small
and medium-sized enterprises, entered the export market.

-- Exports from Brazil's metals industry surged 41 percent
as the country enjoyed a record year for sales abroad.

-- Power generation capacity expected to increase by 4,472
MW in 2005 as 15 new hydro-electric plants will start
commercial operations.

End List.

Danilovich