Resource Sector Developments
After a two-year delay, the government has set 2009 as the start of a new round of licensing to the hydrocarbon resources in the pre-salt basin of the southern reaches of the offshore. The hope is to cultivate the interest of foreign oil majors in the face of a downward trend in oil production since the late 1990s. Meanwhile, the government struck a new deal with a Chinese consortium to the giant Bélinga iron ore deposit - despite continuing protests from environmental groups - complete with a 25-year tax holiday and a tax schedule tied to the price of iron ore and extraction volumes. Real GDP is forecast at 3.8%, with inflation averaging 4%. The external current account will remain in surplus. External debt remains manageable. More…