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Brazil's finance minister Guido Mantega told international press in a conference call on Friday that the recovery of Latin America's biggest economy is indeed underway.
Analysts were highly disappointed with the third quarter figures that the Brazilian government released on Friday, which showed a GDP growth of 0.6% quarter-on-quarter compared to the consensus forecast of 1.2%. The disappointing 3Q12 figures prompted Capital Economics and Barclays Capital to cut their 2012 growth forecast to 1% and 0.9%, respectively.
Mantega said that this year's massive stimulus measures by the government and the aggressive monetary policy by the central bank will take time before their full effects can be seen, especially in terms of investment and industrial production. He also said that some early fourth quarter figures show that the growth of the Brazilian economy has accelerated in 4Q12, and that confidence among both consumers and businesses is on the rise.
According to the minister, other Latin American countries such as Chile, Colombia and Peru have been able to expand at strong rates this year despite the weak global economy thanks to their large commodity exports, while Brazil is more dependent on its big industrial sector, which is currently undergoing a slow recovery.