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Booming Brazil ‘will always expand’

Brazil’s economy received yet another boost in the first quarter of 2008…

Brazil's economy grew at an annual rate of 5.8% in the first quarter of the year, boosted by a construction boom and high world food prices.

Latin America's largest economy is rich in resources and is benefiting from a commodity and farming boom. Growth has also been fuelled by consumer spending as Brazilians enjoy rising incomes and cheaper credit. But analysts believe Brazil may not be able to sustain its economic growth in the year ahead.

Official gross domestic product (GDP) data showed industrial firms fuelled growth, expanding 6.9% compared with the same period last year, while the services sector grew 5%. But analysts believe growth may slow towards the end of the year after the central bank raised rates last week to curb rising inflation.

Alfredo Coutino, senior economist for Latin America at Moody's, enthused: “No matter what happens to the U.S. economy, Brazil's economy will continue to expand. Domestic demand and a wise decision to increase public spending on infrastructure at the start of the year are making up for declining exports.''