Brazilian Economy Grows 5.4 Percent

SAO PAULO, Brazil -- Brazil's economy grew 5.4 percent in 2007 as the nation increased commodities exports and a domestic consumption frenzy engulfed Latin America's most populous country, the government announced Wednesday.

The rate reported by Brazil's Census Bureau was higher than the 5.2 percent growth forecast by economists surveyed by Dow Jones Newswires.

It was a far better showing than 2006, when Brazil had GDP growth of 3.8 percent. GDP is the measure of all goods and services produced in the nation.

Brazil enjoyed strong demand last year from abroad for products ranging from soy to ethanol and iron ore, and consumers in the country of nearly 190 million took out loans in droves to buy big ticket items ranging from apartments to cars.

Gross domestic product jumped 6.2 percent in the fourth quarter compared to the same period in 2006, helping to give Brazil's economy a lift during the last three months of 2007.

Story Continues Below

The expansion is a huge victory for Brazilian President Luiz Inacio Lula da Silva, the nation's first working class president. Elected in 2002 as a leftist amid predictions by investors that he would wreck the economy, Silva surprised many by sticking to orthodox fiscal policy.

He came under withering criticism from his leftist base and from industry for stifling growth with high interest rates aimed at stabilizing the economy, and promised in his 2006 re-election campaign to boost growth to more than 5 percent a year.

Silva is pushing legislators to replace Brazil's tax system with a consolidation package he says will reduce taxes for businesses and individuals while boosting jobs, income and consumption.

Editor's note:
Dollar Slammed Again. What To Do Now.
Why the Fed Interest Rate Cuts Won`t Work
Newsmax`s Intelligent Options Performance Red Hot in 2008.
What the Mainstream Media is NOT Telling You About The Economy
Recession Warning: Irrefutable Evidence of the "R" Word Just Released