MercoPress. South Atlantic News Agency

Brazil revving “for takeoff rivaling China and India”

“Brazil is revving up for an economic takeoff that could rival China and India” according to Martin Weiss author of the New York investment newsletter Money and Markets who praised president Lula da Silva for having built the “foundation for the launching pad”.

What are the forces behind Brazil's market blast-off this year? asks Dr. Weiss after an in depth examination of the Brazilian markets and the factors influencing the growth the economy is currently experiencing. The first force, he says, is the underlying firmness of Brazil's launch pad, its foundation for growth. Brazil's President, Luiz Inácio Lula da Silva, built that foundation by actually holding back the economy. "He paid off the country's debt to the IMF. He built a huge trade surplus and made big headway in balancing the federal budget and he focused on stabilizing the currency", said Dr. Weiss of the Lula da Silva administration orthodox approach to economics. For most of this decade, while China was growing by leaps and bounds, Brazil was lagging behind. But all that changed early this year: Brazil's government has taken new steps to unleash pent-up demand and let the economy start taking off. "This investment explosion is key. With it, Brazil is revving up for an economic take-off that could rival China's and India's", explains Weiss. Just last week, Standard & Poor's surprised the financial markets with an upgrade of Brazil's credit rating, prompting another surge in Brazilian assets. "Brazil's currency, the Real, jumped by the most since September, hit a new six-year high, and busted through the 2-per-dollar level for the first time since 2001," according to Dr. Weiss. "Brazil's currency, the Real, is the strongest among all major currencies in the world this year. Its stock market is leaping ahead of all other major markets. Brazil is now in the spotlight, beginning to attract a torrent of international capital" argues Weiss.