Brazil announces stimulus package worth $4.1BN

School buses, motorcycles, ambulances, tractors and backhoes are on a shopping list of things the Brazilian government plans to buy with $4.1 billion as it seeks to boost confidence in Latin America’s biggest economy and kick-start stalled growth.

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Brazil will also cut the cost of borrowing for state-funded investments in effort to boost construction and create jobs. 

President Dilma Rousseff and Finance Minister Guido Mantega announced the stimulus package today in the capital Brasilia, with Mantega promising “it won’t be the last” measure the government uses to spur activity, the Wall Street Journal reported.

“It’s very important to keep confidence in place,” Mantega said.

“Without confidence, business leaders don’t invest and people don’t buy because they’re afraid of losing their job.”

Rousseff vowed to use stimulus packages “without restriction” as the country attempts to meet its ambitious economic growth target of four percent this year, the Associated Press reported.

In April, the government unveiled a 65 billion real ($31 billion) stimulus package that included tax cuts and more subsidized credit after the economy grew an anemic 0.8 percent year-on-year in the first quarter.

Most experts believe Brazil will expand by just 2.2 percent over the year as the export-driven economy grapples with the impact of the ongoing euro zone crisis and falling investment and spending, Bloomberg said.

The economy grew 2.7 percent last year and 7.5 percent in 2010. By way of comparison, China, which along with Brazil is a member of the so-called BRICS emerging nations group, expanded by 9.2 percent in 2011.

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