Brazil's Mantega Paints Positive Picture At Cabinet Meeting - WSJ.com

Brazil's Mantega Paints Positive Picture At Cabinet Meeting

SAO PAULO (Dow Jones)--Brazil is riding the crest of an economic wave with international investors, local consumers and industrial leaders all optimistic about the country's prospects for 2010 and beyond, Finance Minister Guido Mantega told a cabinet meeting Thursday.

According to his presentation, the Finance Ministry expects Brazil's gross domestic product to grow 5.2% in 2010 and average growth to remain at around 5% for the next five years.

The economy is returning to growth at levels seen before the global economic crisis and those levels will be sustainable in the years to come because inflation is under control, the government is committed to fiscal responsibility, exposure to external risk is low and investment levels are high, Mantega said.

The figures presented by the finance minister were broadly in line with market expectations.

He noted that the economy is being driven by domestic demand, which is seen growing 7.3% in 2010, recovering from an estimated 0.1% drop in 2009.

Meanwhile, investment levels are expected to jump this year. Gross fixed capital formation is seen rising 16.1% in 2010, bouncing back from a decline of 10.0% last year, according to government projections.

Industrial production is seen up 7.1% in 2010 after declining an estimated 5.3% last year.

However, Mantega did touch on one negative facet of the economy, namely the deterioration of the country's current account.

His presentation indicated Brazil's current account deficit would widen to 2.09% of GDP in 2010 from 1.55% in 2009.



-By Alastair Stewart, Dow Jones Newswires; 5511 2847-4520; alastaiir.stewart@dowjones.com"