By Brennan Stark, Contributing Reporter
RIO DE JANEIRO, BRAZIL – Brazil’s economy is expected to stabilize at its current level before accelerating later in the year, but Finance Minister Guido Mantega announced it will likely end 2011 with a growth closer to four percent rather than the 4.5 percent previously estimated.
The GDP managed to expand by 3.1 percent over the same period last year, but IBGE, the Brazilian Geography and Statistics Institute, reported growth rates remain less than hoped for.
The Second Quarter report shows that Latin America’s strongest economy is responding as expected to a string of increases in interest-rates from late 2010 and earlier this year that were designed to halt inflation by limiting access to credit.
Though the reaction is as expected, the slowdown in growth has economists lowering their expectations for Brazil’s 2011 GDP development.
The industrial sector has been particularly affected, with the Real’s rapid growth resulting in a flood of cheap imports which forced the industrial sector to report its lowest figures since the third quarter of 2009.
Exports did grow by 6.1 percent, but imports were up 14.6 percent when comparing this and last year’s Second Quarter figures, the IBGE stated.
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