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Brazilian Economy Grew 0.7% in February, 2011, According to Serasa Experian

|Includes: iShares MSCI Brazil Capped ETF (EWZ), EWZS

The Brazilian economy grew 0.7% from January to February this year, already seasonally adjusted, according to Serasa Experian index of Economic Activity released on Wednesday (13).

Taking into account the activity on the aggregated demand side, growth in the period was driven by the increase in consumption of 0.9% and 8.5% in investments. In January, these components of demand had marked a rate of 0.7% and 6.0% respectively.

From the prospect of aggregate supply, the main highlight was the industry that grew 3.9% and was "the main engine of economic growth in the second month of 2011." At the same time, services advanced 0.7% and the agricultural sector, 0.4%.

In comparison with January 2010, Brazilian GDP growth reached 6.5% in the month, according to data from Serasa Experian. The economic growth accumulated in the 12 months ended in the second month this year, reached 7.1% - in January, the rate was 7.3%.

Consumption is still high
According to economists from Serasa Experian, "the pace of economic slowdown is still limited: it has been affecting very little the private consumption." As an example, they cited the annual growth rate of household consumption, which rose from 7.0% at the end of last year to 8.8% in the buildup to the first two months of this year.

Thus, the expectation of economists is that the Government will promote more measures to reduce the pace of economic expansion, "taking the future path of inflation to levels compatible with the target."