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Brazilian GDP fell 3.6 pct in 4th quarter
(EFE Ingles Via Acquire Media NewsEdge) Sao Paulo, Mar 10 (EFE).- Brazil's gross domestic product shrank 3.6 percent in the fourth quarter of 2008 as the global crisis reached Latin America's biggest economy, officials said Tuesday.
The contraction was the biggest quarterly decline in GDP since 1996, the IBGE statistics institute noted.
Though the Brazilian economy still managed overall growth of 5.1 percent in 2008, the fourth-quarter figure was worse than expected and led some analysts and business leaders to question the government's optimistic forecast for this year.
"So far, everything indicates there will not be a technical recession, because we already have signs of recovery in the first quarter" of this year, Finance Minister Guido Mantega said, while acknowleding it will difficult to meet the 2009 growth target of 4 percent.
The government will continue "taking measures and activating the economy with programs to emerge from the crisis sooner than others," he said.
"We will be one of the few countries in the world that end 2009 with GDP in positive (numbers)," the minister said.
But Brazil's unions say the situation is more serious than President Luiz Inacio Lula da Silva's administration is prepared to admit, pointing to continuing job losses and declines in consumer spending.
Manufacturing, a pillar of the Brazilian economy, shrank 7.4 percent in the last three months of 2008.
The release of the fourth-quarter GDP figure prompted the leader of the FIESP group representing industry in Sao Paulo state, Paulo Skaf, to call on Brazil's central bank to slash its benchmark interest rate from 12.75 percent to 8 percent.
"Industry needs to grow, from February on, around 2 percent (per month) for all the months of the year," he said.
The National Confederation of Industry said Monday night that the Brazilian economy will stagnate in 2009, with growth of less than 1 percent.
Analysts at Banco Fibra told Efe they were already revising downward their growth projections for this year.
"The sharp paralysis of activity we witnessed at the end of 2008 must be felt in 2009 and the labor-market data for the first quarter of this year must reflect even more the effects of the crisis," Banco Fibra economists Maristella Ansanelli and Flavio Mendes wrote in a report.
They predicted that Brazil's GDP will grow by less than 2 percent in 2009.
The political opposition seized upon the numbers released Tuesday to criticize Lula for his handling of economic policy.
"President Lula continued treating the crisis as something temporary and did not anticipate by taking measures at the right moment, when the economy was fine," lawmaker Rodrigo Maia said.
Yet within weeks of the meltdown in world financial markets, Lula's administration provided extra liquidity to Brazilian banks and construction companies, cut sales taxes and funneled money to lenders. EFE
wgm/dr
Copyright ? 2009 EFE News Services (U.S.) Inc.
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