MercoPress. South Atlantic News Agency

Brazilian surprise: 3Q annual expansion reaches 6.8%

Brazil expanded at an annual 6.8% in the third-quarter, but the country was still hit hard by the global financial crisis and that has left investors wondering if Latinamerica's largest economy will avoid a further slide in growth.

On Tuesday the Brazilian government reported that the country's gross domestic product grew 6.8% during the third-quarter from last year's corresponding period, and 1.6% from the previous quarter. Growth was driven by the country's substantial agribusiness industry, as well as construction. The problem is that these are sectors that have been impacted by the global financial crisis and subsequent credit squeeze, along with a drop in demand. Despite the considerable domestic and international slowdown, Brazil's finance minister Guido Mantega insisted that his country's economy would not slip into a recession in 2009 as a result of the global economic downturn. Mantega contended that the economy would grow between 5% and 5.5% during the fourth-quarter. Analysts expect growth to reach 5.2%. Activity will slow in 2009, though Mantega feels a 4% growth target is feasible, while analysts are looking to only 2.5%. Mantega argued though that the strong growth numbers left the country better positioned to weather the global financial crisis.