02 October 2011 17:39 [Source: ICIS news]
BERLIN (ICIS)--The Brazilian economy is booming and growth is likely to remain firm over the next 5–6 years, a producer said on Sunday, calling the country “an island of prosperity”.
Chemical demand in Brazil is expected to increase as the country invests heavily in infrastructure in the coming years to host a football World Cup in 2014 and the Olympics two years later.
“A lot would have to go wrong to derail growth,” the producer said on the sidelines of the 45th annual European Petrochemical Association (EPCA) meeting.
Despite the optimism about demand, chemical producers in Brazil have struggled to compete with imports in 2011 because of an unfavourable exchange rate.
Brazilian chemical imports have increased by 30% in 2011, while local production has dropped by 4%, another producer said, blaming the imbalance on a strong Brazilian real (R).
The real weakened by 15% in September, triggering hopes that the local industry will be able to fight off imports and capitalise on Brazil's growing economy.
The Brazilian currency started October trading at R1.88 to the US dollar, compared with R1.59 to the US dollar on 31 August.
The fall in the value of the real stemmed from jitters over the global economy and a small cut in interest rates in the country, market sources said.
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