Brazil announces $4 bn stimulus package

BRASILIA: Brazil on Wednesday announced plans to spend $4 billion on equipment purchases to stimulate the country’s weak economic growth in the face of a global downturn.
The package aims to “use the purchasing power (of the Brazilian government) to maintain and accelerate economic growth,” President Dilma Rousseff said.
Earlier, Brazilian Finance Minister Guido Mantega said the government plans to spend $4 billion on purchases of domestic goods and equipment to revive the flagging economy, “mainly in the second half of this year.”
He said a little less than $1 billion out of the total $4 billion had already been budgeted.
Mantega said the purchases would include 8,570 school buses, 8,000 trucks to combat drought and for use by the armed forces and farm equipment.
Pointing to the seriousness of the eurozone debt crisis, Rousseff gave assurances that her government “will take the necessary measures to protect production and jobs.”
“This (crisis) scenario is a source of concern but it does not frighten us,” she added. “We have mechanisms to tackle the crisis and we are going to use them without any restriction.”
Brazil’s gross domestic product (GDP) grew a paltry 0.2 percent in the first quarter of 2012, compared with the final quarter of last year.
The South American giant’s growth slumped to 2.7 percent in 2011 after expanding by 7.5 percent the previous year, prompting ministers to take measures to reduce the cost of investment and to stimulate new businesses.
Last August, the government moved to strengthen the domestic industry with tax incentives for high-employment sectors such as automobiles and defense.
And in April, it unveiled new measures to help exporters and breathe new life into the struggling national industry, including help for the auto sector.
The government also moved to bolster the information technology and communications sectors by purchasing computers for schools and extending broadband service across the country.