MercoPress. South Atlantic News Agency

Lula da Silva warns Brazilians of “tough” first quarter

Brazilian president Lula da Silva warned of a “worrisome and tough” first quarter but promised the government is prepared to inject more resources to the economy to help combat the effects of the global crisis and stimulate activity.

One of the moves will be to free more credit for the private sector from Brazil's National Development Bank, Lula da Silva said during his weekly radio show, "Breakfast with the president". Later in the day during a visit in Sao Paulo, the president said that the government "will have more measures to announce this month" but declined to offer specifics. "We're prepared to boost the private sector so they continue to invest and create jobs". Brazilian industry and agribusiness that depend heavily on exports have been hit hard by falling international demand for the country's products. The government has already freed up billions of dollars in emergency credit lines and tax breaks to help prop up the private sector. According to Luciano Coutinho, the Brazilian Social Development bank CEO the institution is planning to invest approximately 50 billion US dollars in 2009. Last Friday government owned Banco do Brasil SA said it will pay 4.2 billion reales (1.8 billion US dollars) for a stake in the banking unit of one of the nation's biggest conglomerates to help ease credit in the region's largest economy. The bank will buy a 50% share in Banco Votorantim SA, owned by family-controlled Grupo Votorantim. The Brazilian economy is forecasted to expand 2% in 2009 after having recorded 5% in 2008 and over 6% in the previous year.