China surpasses U.S. to become Brazil's biggest trading partner

BRASILIA, May 4 (Xinhua) -- China replaced the United States to become
Brazil's biggest trading partner, said Brazil's Ministry of Development,
Industry and Exterior Trade on Monday.

According to the trade balance released by the ministry, the sum of
Brazil's exports and imports with China reached 3.2 billion U.S. dollars in
April, over the 2.8 billion dollars in its trade with the U.S.

Trade Minister Welber Barral said the change was "historic," as the U.S.
has been Brazil's biggest trading partner since the 1930s.

According to Brazil's official statistics, the bilateral trade volume
between Brazil and China reached 36.44 billion dollars in 2008, increasing 55.9
percent from 2007, among which Brazil's export volume to China hit 16.4 billion
dollars, import volume 20 billion dollars, rising 50.8 percent and 56.9 percent
from the previous year respectively.

However, Barral said that the Brazilian government is trying to diversify
the exports to China, which till now are mainly soya, cellulose, fuel, and
manufactured products.

Brazil's finance minister: Global economy improving

Special
Report: Global Financial Crisis

RIO DE JANEIRO, April 4 (Xinhua) -- Brazil's Finance Minister said on
Monday that the situation of the global economy and financial system is
undergoing a slight improvement in the second quarter of 2009.

Guido Mantega said, the international markets are becoming more stable,
though it does not mean the problems caused by the international financial
crisis have been overcome.

The Brazilian economy is registering improvement as well, he said.

"What we have been observing is that in the second quarter of this year the
Brazilian economy is recovering from the impact of the end of last year," the
minister said, adding that recovery is already influencing on the credit levels,
which have "improved a little."

Mantega said the Brazilian economy has reacted positively to the
government's incentives in March and April, especially the automotive and
construction sectors, benefiting from cuts in the tax over Industrialized
Products (IPI).

In the meanwhile, Mantega reaffirmed that the government will not extend
the tax cut to other sectors.

The minister said Brazil's annual basic interest rate Selic must fall
further so that the country could reach the desired credit levels.

Brazil's Monetary Policy Committee (Copom) announced a one percentage point
cut in the Selic rate last week, from 11.25 to 10.25 percent.

With the cut, Brazil no longer has the highest real interest rate in the
world.

Brazil's quarterly industrial production hits 10-year low

RIO DE JANEIRO, April 29 (Xinhua) -- The international financial crisis has led to a sharp fall in the Brazilian industry production indicator in the first quarter of this year, which hit a 10-year low, the country's National Industry Confederation (CNI)announced Wednesday.

According to a study released by the CNI, the indicator which measures Brazil's industry's production fell to 36.1 points in the quarter, lower than the previous quarter's 40.8 points and 52.2 percent in the first quarter of 2008.

The indicator goes from zero to 100. Any figure under 50 indicates a contraction in the activity, which means that production is downward.

The sharp decrease was a result of the expanded and intensified international financial crisis, said the CNI.

Out of the 27 sectors analyzed by the study, 26 registered a shrink in the production with the pharmaceutical industry as the sole exception.

The woodwork industry registered the most significant drop, whose indicator declined to 21.2 points.

The shrink in the industrial production led to a worse employment situation. According to the CNI, all 27 sectors registered decreases in the employment indicator.

Brazil's industrial employment indicator fell to 39.2 points in the quarter, down from 44 points in the previous quarter and 53.1 points in the same period of 2008. It was the worst picture since the CNI began the study in 1999.

The CNI said that Brazilian companies are still facing difficulties in obtaining financial support. Though the first quarter's indicator of access to credit reached the same 32.4 points as that of the fourth quarter in 2008, the figure is lower than the 47.6 points of the same period last year.

The level of satisfaction with the current economic situation also fell to 43.3 points from the previous quarter's 46.4 points. It was the indicator's third consecutive drop.

Despite the above bad figures, optimism still remained for the upcoming six months. The demand perspective indicator rose to 48.3points from the previous quarter's 39.7 points, while the employment perspectives indicator increased to 44.8 points from 40.5 points.

The CNI study surveyed 1,329 companies all over the country from April 1 to April 27.

Brazil cuts annual basic interest rate to 10.25%

Special Report:Global Financial Crisis

RIO DE JANEIRO, April 29 (Xinhua) -- Brazilian Central Bank decided to cut the country's annual basic interest rate Selic from 11.25 to 10.25 percent, the bank's Monetary Policy Committee (Copom) said in a statement on Wednesday.

The new rate, the lowest since the Central Bank started the measurements in 1996, was the third consecutive cut in the Selic rate this year. The country cut the rate from 13.75 to 12.75 percent in January, and from 12.75 to 11.25 in March.

The cut, a unanimous decision by the members of the (Copom), matched the expectation of most economists, who considered that the Central Bank was unlikely to repeat the previous 1.5 percentage point reduction, due to the latest signs of economic recovery.

With the cut, Brazil is no longer the country with the highest real interest rate (interest rate minus inflation rate) in the world. The country's real interest rate of 5.8 percent is now the third highest, after China (6.6 percent) and Turkey (6.4 percent).