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As Finance Minister Guido Mantega continued to predict economic growth of 5.5% for 2010, President Lula announced the second phase of the Growth Acceleration Programme (Programade Aceleração Crescimento, or PAC) with some 959 billion reais ($529 billion) earmarked for public and private investment between 2011 and 2014.  However, as interest rates were maintained at 8.75 percent, Gerard Cremoux, co-head of Latin America investment banking at UBS stated that the stock market may on course to see a correction (although not a crash) as valuations continue to soar.  Such market predictions continue to support the view that interest rates should be raised in order to curb the effects of excessive inflation.  This was supported by the fact that the country’s total bank lending in February rose at its fastest annual pace in five months. As Lula announced the launch of PAC 02, he reinforced that the government will undertake the programme “without losing sight of the need to take care with fiscal responsibility and inflation.”  At the close of the month, statistics from the ‘Companies and Markets’ organization reported that tourism has increased, particularly as a result of the 2014 World Cup and 2016 Olympics.  Brazilian airline Gol Transportes Aéreos reported an increase in year-on-year growth for January 2010.  However, it was noted that the industry could do with more stability due to the fact that less visitors are coming to the country due to the global recession repercussions.

Download: March 2010 Brazil Real Estate and Land Investor Newsletter