September 11, 2009 / 3:28 PM / 10 years ago

UPDATE 1-Brazil 2nd qtr growth shows quick recovery-fin min

* Brazil Q2 growth shows quick recovery - Mantega

* Government actions helped pull GDP back to growth

* Third quarter results should improve even more (Updates with comments, context)

SAO PAULO, Sept 11 (Reuters) - Faster-than-expected economic expansion in the second quarter shows Brazil is having a quick recovery, Finance Minister Guido Mantega said on Friday.

“This is a very positive result. The growth will continue in the third quarter,” he said at a news conference. “This shows that Brazil is one of the most quickly recovering economies in the world. We’re coming out of crisis faster than the biggest economies in the world.”

Mantega credited government action, including steep interest rate cuts and moves to boost liquidity in the financial system, with hastening Brazil’s exit from a short-lived, two-quarter recession.

Nonetheless, the country’s industrial sector will probably shrink slightly in 2009 because of strong contraction late in 2008 and in the first three months of the year, he said.

“We’ll still be stoking the economy in coming months,” he said. “The principal stimulus will be the recovery of credit. Credit has come back and is near pre-crisis levels.”

The effects of 500 basis points in cuts this year to the country’s benchmark interest rate, now at an all-time low 8.75 percent, have yet to be fully felt, he added.

Mantega said he expects the country’s growth will continue through the end of the year, with a reading of 2 percent to 3 percent growth in the third quarter from the previous three months. Expansion in the second half of 2009 should reach 3.5 percent from a year earlier.

That would pull the Brazilian economy to 1 percent growth for all of 2009, Mantega noted.

Brazil’s gross domestic product expanded 1.9 percent in the second quarter from the first three months of the year, faster than the 1.6 percent median forecast in a Reuters survey.

That growth lifted Brazil out of a recession after the economy shrank for a second straight quarter in the first three months of the year. (Reporting by Rodolfo Barbosa and Cesar Bianconi; Writing by Luciana Lopez; Editing by James Dalgleish)

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