BRASILIA--Brazil's economy is showing more signs of a gradual acceleration, with industrial capacity use figures released Thursday the latest positive indicator.
Capacity use rose to 81.4% in November, the highest level in eight months, from 81.2% in October, Brazil'sNational Confederation of Industries, or CNI, reported Thursday.
On Wednesday, the Central Bank of Brazil said its economic activity index increased in November at a quicker pace than in October, as the retail sector remained robust and the industrial sector continued to show signs of recovery.
The figures will come as a relief to President Dilma Rousseff and Finance Minister Guido Mantega.
The pair spent much of 2012 devising and launching programs intended to spur economic growth and make Brazilian exports more competitive after economic growth slowed from 7.5% in 2010 to 2.7% in 2011 and an estimated 0.9% last year.
The measures included tax cuts for manufacturers and for consumers, programs to spur investment in the country's inadequate transport infrastructure and a multi-front battle to weaken the Brazilian real against the dollar.
Those efforts have started to pay off, said Alfredo Coutinho, Latin America director for Moody's Analytics.
"Economic activity rebounded more remarkably at the end of last year, mainly propelled by a policy-stimulated domestic market," Mr. Coutinho said in a note.
An important part of the stimulus is lower interest rates. The central bank left its benchmark rate unchanged at 7.25% at its latest monetary policy meeting Wednesday.
Although that towers above rates in developed economies, it's a historic low for Brazil and down from 12.5% in August 2011.
The government and central bank now face the difficult task of encouraging faster economic growth while keeping inflationary pressure under control. Brazil ended 2012 with an inflation rate of 5.84%, an improvement from 2011's 6.5%, but still well above the official target of 4.5%.
December showed a worrying trend for 2013, with monthly inflation at 0.79%, up from 0.60% in November.
Keeping cost increases under control for consumers, and cutting costs for industry, are an important part of the government's plan to reduce the combination of high taxes, bureaucratic red-tape and transportation expenses known as the "Brazil cost."
Indeed, Brazil's government plans to focus on tax cuts and an overhaul of the tax system in its legislative agenda this year as part of a drive to boost investment and competitiveness, a top presidential aide said Thursday in an interview.
President Rousseff's top congressional liaison, Ideli Salvatti, expressed optimism that the administration will be able to advance its tax and cost-cutting agenda in a bid to boost productivity and economic growth.
"The president is very determined to increase competitiveness, so she's working on many fronts, including regulatory simplification, tax simplification and cutting costs of inputs," she said.
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Capacity use rose to 81.4% in November, the highest level in eight months, from 81.2% in October, Brazil'sNational Confederation of Industries, or CNI, reported Thursday.
On Wednesday, the Central Bank of Brazil said its economic activity index increased in November at a quicker pace than in October, as the retail sector remained robust and the industrial sector continued to show signs of recovery.
The figures will come as a relief to President Dilma Rousseff and Finance Minister Guido Mantega.
The pair spent much of 2012 devising and launching programs intended to spur economic growth and make Brazilian exports more competitive after economic growth slowed from 7.5% in 2010 to 2.7% in 2011 and an estimated 0.9% last year.
The measures included tax cuts for manufacturers and for consumers, programs to spur investment in the country's inadequate transport infrastructure and a multi-front battle to weaken the Brazilian real against the dollar.
Those efforts have started to pay off, said Alfredo Coutinho, Latin America director for Moody's Analytics.
"Economic activity rebounded more remarkably at the end of last year, mainly propelled by a policy-stimulated domestic market," Mr. Coutinho said in a note.
An important part of the stimulus is lower interest rates. The central bank left its benchmark rate unchanged at 7.25% at its latest monetary policy meeting Wednesday.
Although that towers above rates in developed economies, it's a historic low for Brazil and down from 12.5% in August 2011.
The government and central bank now face the difficult task of encouraging faster economic growth while keeping inflationary pressure under control. Brazil ended 2012 with an inflation rate of 5.84%, an improvement from 2011's 6.5%, but still well above the official target of 4.5%.
December showed a worrying trend for 2013, with monthly inflation at 0.79%, up from 0.60% in November.
Keeping cost increases under control for consumers, and cutting costs for industry, are an important part of the government's plan to reduce the combination of high taxes, bureaucratic red-tape and transportation expenses known as the "Brazil cost."
Indeed, Brazil's government plans to focus on tax cuts and an overhaul of the tax system in its legislative agenda this year as part of a drive to boost investment and competitiveness, a top presidential aide said Thursday in an interview.
President Rousseff's top congressional liaison, Ideli Salvatti, expressed optimism that the administration will be able to advance its tax and cost-cutting agenda in a bid to boost productivity and economic growth.
"The president is very determined to increase competitiveness, so she's working on many fronts, including regulatory simplification, tax simplification and cutting costs of inputs," she said.
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