MercoPress. South Atlantic News Agency

Brazilian minister optimistic about the economy.

Brazil's Finance Minister expressed optimism about the country's economic growth potential in 2004, forecasting that the gross domestic product (GDP) could rise by 5% or more this year.

"Analysts are adjusting upward their growth projections and I'm never going to argue with the optimists" said Finance Minister Antonio Palocci following a business gathering in Rio de Janeiro.

Mr. Palocci said the government had not yet altered its 3,5% GDP forecast for 2004 but "original projections are being overtaken by what the economy is really producing".

In 2003 the Brazilian economy contracted 0,2% but in the first quarter of this year expanded 1.6% percent and latest data suggests a strong economic rebound.

Brazil's controversial Finance minister insisted that orthodox policies will ensure "strong growth for at least a decade. Brazil must not settle for low growth levels if we are to become a developed country".

The latest data indicate that Brazilian retail sales expanded for the sixth month running and accumulate an 8,4% growth this year. May 2004 sales compared to a year ago jumped 10%.

White line home equipment expanded 35,5%; food, beverage and cigarettes 5% and clothing, textiles and footwear 22,5%.

The Brazilian Geography and Statistics Office revealed last week that employment during May increased 1% over April, and 0,9% over May 2003. However in the first five months of this year the accumulated index actually dropped 0,3% and 0,9% in the last twelve months.