Brazil & Southern Cone - February 2011 (ISSN 1741-4431)

In the fourth quarter of 2010 the economy picked up again, after slowing in the third. The strong tourism figures for early 2011 suggest that this will be a bumper year for the economy. The official GDP figures for the fourth quarter will not be published until March, but preliminary figures for industrial production and retail sales point to a strong acceleration in the final part of 2010. According to the official statistics agency, INE, manufacturing industry increased output by 4.6%, year-on-year, in December 2010 and by 6.2% (also y-o-y) in the final quarter of 2010. Stripping out the performance of the Ancap oil refinery, the quarterly y-o-y growth rate was 2.2%. This followed a dip in the third quarter when Ancap-less output actually fell y-o-y. The main reason for the pick up in the final part of 2010 was a recovery in the meat-packing industry. The industry had slowed down sharply in the Southern Hemisphere winter. The increase in slaughtering in the final part of the year also boosted the leather industry, since there was more product available.  Form this base, about 60% of the country's manufacturing industry, as monitored by Deloittes, a consultancy, increased output in the final quarter of 2010. In the final quarter of 2010 there was also a noticeable increase in imports. Between May and October 2010 imports had been running at between US$650m and US$750m a  month. In November this figure jumped to US$900m and in December it hit US$1bn for the first time ever.

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