Brasilia - Brazil's government on Thursday announced an 8.4-billion-reais (3.6-billion-dollar) economic stimulus package, including tax cuts in personal income and cars, to revive its flagging economy.

The measures are aimed at ensuring a 4-per-cent growth in the country's gross domestic product (GDP) for 2009, said Finance Minister Guido Mantega when presenting the package together with Economy Minister Miguel Jorge and Central Bank head Henrique Meirelles.

Analysts have predicted a 2.5-per-cent growth GDP growth rate for Brazil's economy in 2009, compared to an expected growth of more than 5 per cent this year.

The new measures were announced after a meeting between President Luiz Inacio Lula da Silva and Brazilian business leaders.

Middle income earners, currently paying between 15 and 17.5 of their income in taxes, will see their bracket lowered to between 7.5 per cent and 22.5 per cent respectively.

At the same time, an industrial earnings tax, consumer loan taxes and taxes on cars are to be cut. Taxes for cars with an engine volume below 1 litre are to be scrapped completely, and lowered for cars with a displacement of between 1 and 2 litres.

The government had promised to prevent layoffs in Brazil's car industry, which accounts for 5 per cent of the country's GDP and employs 120,000 people, Jorge said.

Car production slumped by 28.6 per cent in November to 194,879 units year-on-year.

Brazil, a nation of 190 million, is the world's 10th largest economy. (dpa)