Brazil continues to lead the Region

"We have to thank Brazil around" was the phrase that was heard in one of the panels of the "Meeting of Leaders" event held last week in Argentina.

Good news for Brazil, good news for Latin America and especially to Argentina: the Brazilian economy officially out of the recession that was deep.

The Brazilian Institute of Geography and Statistics gave the good news by confirming that economic activity expanded by 1.9% between April and June compared with the first quarter. The figure was better than analysts had forecast in a Reuters survey that placed the recovery of GDP at 1.6%. The Brazilian industry for its part, in a context of strong exchange rate appreciation reduces the competitiveness, had a performance in the quarter leading to expand by 2.1%.

Not only the Brazilian industry is recovering, but from the livestock farming sector is undergoing a great time thanks to the policies of the Lula government stimulus. During this month, Brazil ended the harvest of the 2008-2009 campaign and the state's National Supply Company estimated that it would reach 134.34 million tons of grain, this being the second highest production in history.

The recovery of the Brazilian economy owes at least in part, recognition of stimulus measures ordered by the government to boost the economy, which included temporary tax breaks to stimulate consumption and industry.

Moreover, the slowdown in the inflationary dynamic variation in the month of August stands at 4.36%, below the inflation target set by the Central Bank of Brazil at 4.5%, allowing the Central Bank to maintain the current bias without recourse to a tougher attitude that could jeopardize the economic recovery and increase pressure on exchange.

The benchmark interest rate (Selic), is currently at its historic low of 8.75%, and everything indicates they will remain at that level. For the Monetary Policy Committee (Copom) Series Central Bank cuts interest rates practiced between January and July lagged effects will continue to boost the economy. The price is also Copom economic content, which is a message on the profile that will keep monetary policy in the interest of economic recovery.

A happy Lula said after the news of GDP growth: "This country really was more prepared than the entire developed world to tackle the economic crisis, but throughout Europe and the United States".

But Lula is not only celebrating the end of the recession in Brazil. The importance of the Brazilian economy in the region increases the chances for recovery by the beneficial effects that increased economic activity in Brazil might have on the demand for American products. The Argentines, saddened by the defeat in football against the selection of Rio, celebrate the improving economy by their neighbor direct implications on the industry in Argentina.

The recovery of Brazil also has a solid foundation of long-term durability. The grounds for confidence that this is so, is a proactive long-term policy to which you are adding more social justice. In this context falls a few days ago the creation of a new state oil company, called petrosal who will manage the deepwater fields, discovered three years ago, using profits generated by that activity to improve health and education in Brazil .

And with the increasing development of the oil sector, one of Brazilian firms has continued to improve its profile and seeks to build upon its strong growth is Braskem (BVSP: BRKM3 NYSE: BAK), the largest petrochemical company in Latin America, a young, established in 2002. Earlier this year, the magazine market had revealed that the objective of Braskem for 2012 was to be among the 10 largest petrochemical companies in the world, and that goal is getting closer.

The petrochemical industry also seeks to develop in the renewable energy segment. In mid August, Braskem opened in the state of Bahia two production of ETBE, a gasoline additive produced from ethanol. Part of the production of ETBE will be used for the Japanese market through long-term contract signed with Sojitz Corporation, which provides for delivery of 120,000 tons of bioaditivo in three years.

Three weeks ago, Braskem had initiated discussions with the controlling shareholders of rival Unipar Quattor-controlled Participacoes (BVSP: UNIP3), another Brazilian petrochemical producer, to search for a strategic alliance options. Although not yet achieved positive results, the possibility of reaching an agreement would be an opportunity to promote growth.

Earlier this month, the company formed a new distribution company dubbed variant that will focus on sales of thermoplastic resins. At this time Fernando Butze, variant operations chief said: "The separation of business allows us to give priority to each segment and streamline distribution. Variant is what was formerly the division of chemical polymers and petrochemicals distributor quantiQ, wholly controlled by Braskem. The company also will participate in the Ethylene XXI project in Mexico are looking to increase production of ethylene and its derivatives.

Baskem shares have achieved a remarkable recovery in recent months. Should feel very pleased investors provided by the company in early March when its ADRs traded at U.S. $ 3.74. In the Friday, the company's ADRs closed at U.S. $ 12.32, still far from the U.S. $ 20.1 that he has achieved in August 2007 (or U.S. $ 25.82 February 2005) and Without doubt, without exceeding the medium term problems with the consolidation of its growth and expansion.


Horacio Pozzo


Brazil confident expects to grow to 4% in the next twelve months. Its stock market has advanced the time of the economy and grows 63% in dollars, clearly reflect these expectations. More hikes expected stock and good news for the Bovespa still rising, fast forward to other investors and invest here