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Economy & Business - April 2006

A few problems

The new finance minister, Guido Mantega, argued on 20 April that disappointing tax receipts for March, and even more disappointing retail sales figures for February, should not raise doubts about the state of the economy. The tax and retail sales figures were published on the same day that the central bank's monetary policy committee, Copom, announced its decision to cut rates by 0.75 of a percentage point. Our view is that the economy will still grow strongly this year, though more of the growth will come from the external sector than the long-awaited domestic recovery.

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