MercoPress. South Atlantic News Agency

Agriculture boosts Brazilian growth to 5.7% in third quarter

Brazil's economy expanded 5.7% in the third quarter, boosted by big gains in the agricultural and industrial sectors, and it appeared on track to grow 5% for the year, according to government figures.

Gross domestic product growth for South America's largest economy in the July-September period was much higher than the 4.8% predicted. Growth was up 1.7% in the third quarter compared to the second quarter of this year, the Brazilian Census Bureau said. For the 12-month period ending in September, GDP rose 5.2%. The third-quarter result prompted analysts to revise their prediction of GDP growth for 2007 upward from 4.7% to 5% or more. Brazil's economy expanded 3.8% last year, and President Luiz Inacio Lula da Silva is trying boost annual growth to 5% amid criticism that the nation's economy is expanding slower than the world's other major emerging economies in China, India and Russia. Central Bank President Henrique Meirelles said the result "confirms again that the cycle of growth Brazil is experiencing is strong and sustainable." Brazil's recent history includes frequent bouts of boom and bust economic cycles, but many experts believe those trends have been eliminated through orthodox monetary police embraced by Lula da Silva's administration after he took power in 2003 as the nation's first blue-collar president. Brazil's important agricultural sector drove the third-quarter expansion, surging 9.2% from the same quarter a year earlier, amid strong international demand for Brazilian soy, beef, cron and sugar. The industrial sector expanded 5%, and the service sector grew 4.8%. The third-quarter gain came as consumers from Latin America's most populous nation continued a buying spree that took off this year, snapping up new cars and other expensive goods because of higher salaries and easier credit brought on by falling interest rates. Brazil's benchmark Selic interest now stands at 11.25%, down from a high of 19.75% in mid-2005.