MercoPress. South Atlantic News Agency

Brazilian stock exchange record.

The Bovesopa index of the Sao Paulo stock exchange, the most dynamic and influential of Brazil reached last week for the first time since its creation 35 years ago, 20,000 points. The peak reflected market reaction to the official announcement that the Brazilian recession was over since the GDP in the third quarter expanded 0,4%.

Although at the end of the week it stabilized in 19,850 points, the Sao Paulo stock exchange has proved the most expansive of Latinamerica with a 78% gain since the beginning of the year.

"Even when GDP figures are not as good as expected after two negative quarters, what matters is that the economy is recovering and heading for 2004 with strong prospects", indicated a market analyst.

Besides the 0,4% expansion the Brazilian government last week announced that the GDP/debt ratio of Brazil had dropped from 57,8% to 57,2% in October, basically because of a 2,3% appreciation of the Brazilian currency and a tight fiscal policy.

However the GDP/ratio has accumulated a 0,67% expansion since January 2003.

Brazil's interest payments during the ten months of 2003 were equivalent to 9,77% of GDP, almost double the budget primary surplus of 5,06%. This means that the nominal budget deficit stands at 4,71% of GDP.

Another index was unemployment indicating that during October it remained steady at 12,9% of the working force, almost equivalent to September, although the number of people looking for jobs dropped 0,5%.

The average salary of the working force keeps eroding, 0,7% in October compared to the previous month accumulating a 15,2% loss in the last twelve months. When taking office President Lula da Silva promised to create 10 million jobs during his four year mandate.

His popular standing remains particularly strong but the latest poll indicates that 54% of Brazilians believe the president is failing in his combat against unemployment.