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Generally positive news with regards to the Brazilian economy.  Goldman Sachs recommended investors to buy shares of Brazilian banks based on their outlook for economic growth and the impending elevation of interest rates (which the organisation predicted to rise to 12.5 percent by the end of the year).  Yet, as Gafisa SA predicted that house prices in Rio de Janeiro and São Paulo could jump by as much as 40 percent in the next year, rising concerns of potential asset bubbles forming came to the forefront of policy makers minds with Central Bank Chief, Henrique Merielles stating: “the central bank always has to be aware the risks of this kind of exuberance creating price distortions in the economy.”   Indeed, whilst the Deloitte Global Economic Outlook report pointed to the country having strong growth with modest inflation in 2010 and the IMF predicting that Brazil (along with India and China) will significantly outperform more mature economies – the latter warned of the need to manage the ‘hot money’ floods, particularly over the next few years.  In other news, Mark Mobius of Templeton Asset Management stated that Brazil’s economy is “more sustainable” than China due to the fact that the country does not have the need to rely on imports as much, stating: “Brazil is in a situation where it has tremendous mineral and agricultural resources.” Earlier in the month, Labor Minister Carlos Lupi predicted that over two million formal jobs will be created in 2010 and the industrial sector will see a steady improvement.

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Download: January 2010 Brazil Real Estate and Land Investor Newsletter