Property owners will benefit from record low interest levels
Friday, December 18, 2009
Interest rates are kept at record low for Brazilian property owners, Brazilian monetary policymakers held the country's benchmark interest rate at 8.75% which have been maintained for the third successive bank meeting.
The interest-rate decision arrived ahead of report on third-quarter gross domestic product. Economists polled by Dow Jones Newswires expect expansion of 1.9% from the second quarter, and a decline of 0.3% from the third quarter of 2008. Latin America's largest economy continued to bounce back from the shrinking GDP figures recorded in the fourth quarter 2008 and first quarter this year. The Growth has been fueled by an aggressive monetary easing cycle, hikes to government spending and tax cuts on consumer goods.
The central bank slashed a cumulative 500 basis points off the benchmark interest rate this year in an effort to help jump start the then-flagging economy. The central bank's Copom rate-setting panel once again maintained the Selic at 8.75%. The panel, however, altered its statement that hinted at sooner-than-expected rate increases.
"The country is still on a growth trajectory, but it's a more moderate growth, and also more balanced," said Newton Rosa, an economist at the Sao Paulo-based Sulamerica Investimento fund. "But this has a positive side in that it shouldn't put pressure on the central bank to raise interest rates in the short term," he added.
Meanwhile, Brazil's government said it will lend an additional $80 billion reais ($45.3 billion) to the national development bank over the next two years to boost investment and pushing ahead with spending on infrastructure and new Brazilian property.The measures have increased consumers' access to credit and increased confidence. The government will also extend 369 million reais ($208 million) worth of tax breaks on capital goods items until June 2010 and authorize private banks to raise cash via the issuance of debentures, Brazil's Finance Minister Guido Mantega added.
According to Brazil's census bureau, Family consumption rose 2.0% quarter-on-quarter, while government consumption also increased 0.5% in the third quarter. They reported an uptick in November consumer prices. In More good news for investors, the annual inflation rate currently runs at 4.22%, below the government's target of 4.5. Economists expect inflation to remain below the target, not only in 2009 but also 2010.
Social BookmarkingThe interest-rate decision arrived ahead of report on third-quarter gross domestic product. Economists polled by Dow Jones Newswires expect expansion of 1.9% from the second quarter, and a decline of 0.3% from the third quarter of 2008. Latin America's largest economy continued to bounce back from the shrinking GDP figures recorded in the fourth quarter 2008 and first quarter this year. The Growth has been fueled by an aggressive monetary easing cycle, hikes to government spending and tax cuts on consumer goods.
The central bank slashed a cumulative 500 basis points off the benchmark interest rate this year in an effort to help jump start the then-flagging economy. The central bank's Copom rate-setting panel once again maintained the Selic at 8.75%. The panel, however, altered its statement that hinted at sooner-than-expected rate increases.
"The country is still on a growth trajectory, but it's a more moderate growth, and also more balanced," said Newton Rosa, an economist at the Sao Paulo-based Sulamerica Investimento fund. "But this has a positive side in that it shouldn't put pressure on the central bank to raise interest rates in the short term," he added.
Meanwhile, Brazil's government said it will lend an additional $80 billion reais ($45.3 billion) to the national development bank over the next two years to boost investment and pushing ahead with spending on infrastructure and new Brazilian property.The measures have increased consumers' access to credit and increased confidence. The government will also extend 369 million reais ($208 million) worth of tax breaks on capital goods items until June 2010 and authorize private banks to raise cash via the issuance of debentures, Brazil's Finance Minister Guido Mantega added.
According to Brazil's census bureau, Family consumption rose 2.0% quarter-on-quarter, while government consumption also increased 0.5% in the third quarter. They reported an uptick in November consumer prices. In More good news for investors, the annual inflation rate currently runs at 4.22%, below the government's target of 4.5. Economists expect inflation to remain below the target, not only in 2009 but also 2010.
Labels: Latest-News
