Brazil sees economy surge by 9%

Sugar cane field near Araraquara, Brazil (photo: Robert Plummer) Agriculture is big business in Brazil, the world's largest sugar producer

Brazil's economy grew at its fastest rate in at least 14 years in the first three months of 2010, official figures have shown.

Its gross domestic product (GDP) surged by 9% compared with the same period a year earlier.

However, higher interest rates and the withdrawal of some tax breaks are expected to cool growth eventually.

Brazil's economy is the largest in Latin America and the eighth-biggest in the world.

Agriculture and industry were among the growth sectors, the government said.

'Confirmation'

Much of Brazil's economy is driven by domestic consumer demand rather than exports - which analysts say means it is relatively insulated from Europe's debt crisis and the projected slow recovery of the US.

"These figures are confirmation of what the market was talking about, a strong first quarter with very strong domestic demand despite the weak external sector," said Pedro Tuesta, senior Latin America economist at research firm 4Cast Inc.

The government said the annual growth was the swiftest pace seen since at least 1996.

Brazil's economy grew by 2.7% on the previous three months - again beating analysts' expectations.

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