Brazil’s economy expanded nearly 11% in April compared to the same month a year ago, as shown by The central bank’s Brazilian Economic Activity Index.
Brazil’s economy has been among the fastest-growing in the world this year, expanding 9% year-on-year in the first quarter of 2010 – the fastest rate in at least 14 years.
Agriculture and industry were among the growth sectors, the government said. Much of Brazil’s economy is driven by domestic consumer demand rather than exports – which analysts say means it is relatively insulated from Europe’s debt crisis and the projected slow recovery of the US.
Government officials have downplayed the risk of overheating but some say such rapid growth in an economy which suffers from chronic lack of infrastructure and skilled labour force could be unsustainable and inflationary. However, higher interest rates and the withdrawal of some tax breaks are expected to cool growth eventually.
Brazil is the second-fastest growing economy among the BRIC countries, behind China, which expanded 11.9% in the first quarter, ahead of India, which grew 8.6% in the first three months of the year. Russia grew 2.9%.
Bank of America Corp. has raised its forecast for Brazilian economic growth this year, saying the economy will expand 7.2% in 2010, up from a previous estimate of 6%.
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