MercoPress. South Atlantic News Agency

Brazilian economy contracted 0,2% in 2003.

The Brazilian economy contracted 0,2% in 2003, in direct contrast with the 1,9% expansion of 2002, 1,3% of 2001 and 4,36% of 2000, according to the Brazilian Geography and Statistics Office, IBGE.

The Lula da Silva administration on taking office January 2003 forecasted a 2,8% growth of the economy, but it successively cut estimates to 0,3%, still well above the minus 0,2% final result.

The Brazilian economy during the last ten years (1994-2003) grew annually 2,4% with an only contraction in 1999 (0,5%).

Per capita income also dropped last year, 1,5% the worst since 1992 (2,1%). Per capita income expanded 2% in 2000; 0,1% in 2001 and 0,6% in 2002.

According to IBGE the poor performance of the Brazilian economy was caused mainly by a contraction in domestic demand, 3,3%, as a result of lower per capita income and higher unemployment.

However the downfall wasn't worse because of an exceptional growth in exports, 14%, and a 1,9% contraction in imports.

While Brazilian industry contracted 1% in 2003, agriculture expanded 5% and services 0,1%, with construction experiencing the highest drop 8,6%.

Government officials point out that in spite of the overall retraction, in the last quarter of 2003 the economy expanded 1,5% compared to the third quarter, which indicates the economy is beginning to rebound.

However compared to the last quarter of 2002, the Brazilian economy contracted 0,2% in October-December last year. Similarly until the third quarter of 2003 the accumulated retraction was 0,3%.