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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: wl9839 who wrote (15258)	5/13/1999 8:43:00 AM
From: wl9839	Read Replies (1) \| Respond to of 22640

Brazil Seen Reporting Recession Bottomed Out in 1st Qtr, Shrinking 0.8% Brasilia, May 13 (Bloomberg) -- Brazil's recession bottomed out in the first quarter as the return of foreign credit lines and a string of interest rate cuts revive Latin America's biggest economy. The gross domestic product shrank 0.8 percent from the fourth quarter after shrinking 1.6 percent the last three months of 1998, according to a Bloomberg survey of three economists. The government is due to release the data at 11 a.m. (10 a.m. New York time). The year-on-year decline for the quarter could be 2.9 percent, according to an average of four forecasts. They ranged from a 1.9 percent to 5 percent contraction. While the shrinking $540 billion economy has driven unemployment to near a record high, Brazil's recovery from January's currency devaluation means growth could return by the second half. ''The first quarter and the whole year won't be as bad as initially expected,'' said Adrienne Pratt, a Latin American economist with the Economist Intelligence Unit in London. ''They're doing incredibly well.'' The first quarter was buoyed by surging car production, stoked by the suspension of some auto taxes. Looking ahead, growth could be driven by central bank interest rate cuts. Yesterday, Brazil cut rates for a sixth time in seven weeks, and central Bank officials suggested more cuts could come soon as inflation slows. The bank cut its target overnight interest rate to 27 percent, its lowest level since September, from 29.5 percent. That's the second cut in six days. The rate had been as high as 45 percent after January's currency devaluation. This is a rate ''that won't be around for long,'' said Luis Fernando Figueiredo, monetary policy director at the bank. The following is a breakdown of the quarter-on-quarter forecasts by firm. Firm Forecast Bankers Trust -1.2 J.P. Morgan 0.4 MCM Consultories -1.6 The following are the year-on-year forecasts. Firm Forecast BCP Securities -5.0% J.P. Morgan -1.5% Bankers Trust -3.1% MCM -1.9% ------------------------------------------------------------------------ © Copyright 1999, Bloomberg L.P. All Rights Reserved.