Now investment expenditures are rising dramatically, given the demise of the last bastions of doomsday economists predicting a W. No L, no U nor even a W.
Business Confidence has reached its highest level since 2005, much higher than a year ago. Mother's Day Sales grew 35% compared to a year before, giving fuel motions to reduce Sales Tax permanently. The Lafer Curve theory seems to have been proved once and for all in Brazil.
Purchases of equipment, middle sized, financed by BNDES rose 40% in October 2009, and capacity is running 100% in many sectors. Imports have risen 15%, which will stabilize our exchange rate without continuous government intervention.
Though car production rose 92% in January 2009, a clear sign that the financial crisis would not hit the rest of our economy, sales of trucks lagged due to Doomsday Economics. Nouriel Roubini toured Brazil spreading fear and made headlines.
Now there is a waiting list for trucks as well.
Unemployment down to 7,7%, which for Brazil is rather low. Due to Labor Laws, and FGTS deposits, workers in Brazil change jobs every 4 years, rather than usual 8 years in other countries. This increases the unemployment rate, but actually workers are getting hold of their FGTS reserves, which usually pay zero interest rates.
Fortunately most businessmen do not take economists in Brazil very seriously, so the doomsday predictions did not affect Brazilians as much as American and Europeans.
There may be some inflationary pressures in 2010, and interest rate hikes, but nothing to be very worried about.