Sao Paulo - Brazil's President Luiz Inacio Lula da Silva, an optimist to the bone, keeps repeating his mantra that Brazil, the world's 10th largest economy, will emerge from the turbulence rattling the global economy with only minor scratches.

"We will do everything to achieve a 4-per-cent growth [of gross domestic product] in 2009," Lula says optimistically, not wasting a thought on recession.

A recent Organization for Economic Cooperation and Development survey confirmed the president's positive outlook, saying that Brazil's emerging economy was the only one among the 30 surveyed economies that still showed a positive growth environment.

However, many observers see dark clouds rising in Brazil's sunny skies. A weekly central bank poll among 80 banks and management consultancies predicted a GDP growth rate of 2 per cent for 2009, down from previous estimates of 2.5 per cent and significantly lower than the 2008 forecast of 5 per cent.

"They [the analysts] will be wrong," insisted Lula, whose popularity remains stellar owing to his social policies. In 2007 the former union leader announced a 500-billion-reais (212-billion-dollar) stimulus programme, focusing on infrastructure development. Not a single centavo of that sum would be cut, Lula insisted.

Brazil's carmakers, the backbone of the country's industry sector, are already feeling the bite of the global downturn. The industry, which contributed about 5 per cent to the country's GDP in the past years, sold a record of 2.82 million units in 2008, but will not make a prognosis for this year.

Foreign carmakers Volkswagen, Renault, Fiat and General Motors have cut production and have been forced to lay off staff due to the global recession.

In November, Brazil's industry employment rate declined 0.6 per cent, the biggest drop in four years.

"The effects of the financial crisis arrived at the job market after two months of declines in industry output," Denise Cordovil of Brazil's statistics office said.

Car production slowed in December to 102,000 units, a slup of 41.7 per cent compared to the previous month, and was down 54.1 per cent year-on-year.

Sao Paolo's key Bovespa index ended 2008 down 41.2 per cent, the biggest drop in more than three decades.

At the same time, Brazil's economy is battling the reais' slide against the dollar. The greenback gained 33.1 per cent in 2008, driving up the prices of imports and consumer prices.

Due to the expected slump, pressure mounts on Brazil's Banca Central to lower the base overnight lending rate from its current 13.75 per cent.

Lula in December urged central bank chief Henrique Meirelles to cut interest rates, saying the cut should come at the start of the year.

Central bank governors are meeting next week, but it remains unclear wheather Lula will be getting his way. (dpa)