Brazil's economic activity has been decelerating from higher levels verified last year, when GDP growth reached 7.5%.
Our GDP projection of 3.2% for 2011 is below Brazil’s potential growth of 5%. Despite this slowdown, we feel this will help Brazil get on firmer ground of low-inflationary growth for the upcoming years. Despite recent sub-par industrial production indicators, domestic demand (we expect an approx 5% projection for 2011) remains resilient, boosted by strong household earnings and credit expansion. Labor market conditions have remained extremely favorable, with the unemployment rate now at 6.0% when at the beginning of 2010 the rate was 7.2%. Credit expansion continues to be firm despite...
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