Brazil stimulates construction to spur economy
Brasilia: Brazilian Finance Minister Guido Mantega Tuesday announced a series of measures to promote investment in the construction industry and spur economic growth.
The measures include tax breaks for the sector, reduced labour costs and very low-cost loans.
Mantega had pledged new stimulus measures after figures released last week showed the economy grew just 0.6 percent in the third quarter relative to the previous three months, or half the government's forecast.
The measures were announced at a ceremony - presided over by President Dilma Rousseff - marking the completion of 1 million homes under a government initiative to promote construction of low-income housing.
Mantega said payroll-tax exemptions already enjoyed by some sectors will be extended to the construction industry.
"I won't say forever because that's a long time, but for a long period of time," the minister said of the exemption, adding that the measures are aimed at combating an economic slowdown brought on by the global financial crisis.
The fiscal stimulus will cost the government nearly 2.85 billion reais (USD 1.43 billion) in annual tax revenue.
In addition to the tax breaks, the government also will offer construction companies a nearly 2 billion reais (USD 1 billion) low-cost working capital credit line with extended payment terms.
Civil construction "accounts for nearly half the investment in the country and therefore stimulating the construction industry is stimulating investment in the country", the minister said.