* Tax breaks seek to revive struggling industries
* Measures extended as other stimulus has yet to bear fruit
* Brazil says ready to take more measures to lift activity
By Ana Flor and Natalia Cacioli
SAO PAULO, June 29 The Brazilian government
extended domestic tax breaks on home appliances and furniture,
Brazilian Finance Minister Guido Mantega said on Friday,
maintaining efforts to help ailing Brazilian industries.
Tax cuts on refrigerators, washing machines and other
household appliances known as white goods will be extended for
two months and for furniture for three months, Mantega told
reporters in Sao Paulo.
The measure is one of several economic stimulus measures
unveiled in recent months as President Dilma Rousseff struggles
to revive a stagnant Brazilian economy. After annual growth of
7.5 percent in 2010, the economy began to sputter last year and
in recent quarters has all but stood still.
"These measures have helped white goods sales increase 22
percent this year," Mantega said. "We hope that in the second
half these numbers will increase."
The 22 percent white goods increase was for the January to
May period and compared to a year earlier.
The measures should help the economy, which the central bank
expects to expand 2.5 percent this year, to grow at an
annualized rate of 3.5 percent to 4 percent in the second half
of the year.
Reuters, citing a government official, reported early on
Friday that Brazil's government planned to extend the tax breaks
announced late Friday by Mantega.
Rousseff has made state-led efforts to revive the economy
the top priority of her government. Be it through tax incentives
for key industries or increased lending by state-controlled
banks, Brazil's government plays a leading role in the country's
economy, which surpassed Britain's last year to become the
In December, the government slashed the so-called IPI tax on
home appliances and in March extended the break to include
furniture and other products. Brazilian industries in recent
years have been crippled by appreciation of the real, the
country's currency, which raised costs for many manufacturers
and hindered their ability to compete with a flood of cheap
In addition to tax breaks, Rousseff has also sought to help
industry by targeting state purchases of select products.
Earlier this week, the government announced measures to increase
government purchases of everything from school buses to train
wagons to armored vehicles.
The stimulus measures have yet to bear fruit, though.
Brazil's economy is expected in 2012 to post another year of
mediocre growth, with some economists predicting growth of as
low as 1.5. The central bank, for its part, is forecasting
growth of about 2.5 percent.