Clarice Messer, research director at Fiesp, the federation of São Paulo industrialists, said, 'We can't see from where and when that spectacle will appear; we hope that things will get better towards the end of the year.'
Messer reported that, in May, industrial production in São Paulo was 0.5% higher than a year earlier, while sales were down 1.5% -so the increase in output is only going to engross stocks.
The outlook, she said, was for year-on-year comparisons to be lower in both June and July.
Anfavea, the auto industry's association, reports that car production in June, at 141,545 units, was 14.4% lower than in May and 1.9% lower than in June 2002. June sales, at 100,102, were the worst since February last year; 6.1% lower than in May and 7% lower than a year earlier.
The central bank appears to share the pessimistic view. On 30 June it lowered its growth forecast for this year from 2.2% to somewhere between 1.5% and 1.8%.
Finance minister Antônio Palocci, though, tends to side with his boss: he says he is confident that GDP will grow by about 2%.
* Brazilian bankers are protesting publicly that they are not to blame for the high interest rates currently prevailing. Gabriel Jorge Ferreira, president of Febraban, the banking federation, said last week, 'There is no doubt that interest rates in Brazil are harming productive activity and inhibiting investment, but the banks are not the big villains of the economy.'
The main blame, he says, lies with a deficit-burdened, chronically indebted state, whose demand for resources squeezes out the private sector.
The benchmark interest rate set by the semi-autonomous central bank is currently 26%, but rates for companies go as high as 67%, and consumer credit can be charged up to 180%.
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