Weekly Report - 31 October 2006

President Lula da Silva had to soothe the financial markets on 30 October following comments from his ministers, which seemed to indicate there would be a shift in the government's fiscal policy. The comments reveal the split between the "conservatives" and the so-called "developmentalists" within the government will continue over the next four years. Lula, however, seems determined to seek a "middle path" to boost economic growth without compromising the hard-gained economic stability.