Brazilian President Luiz Inacio Lula da Silva has promised to spend big on projects in 2008 to generate jobs and growth. - File

Brazil will invest heavily in infrastructure this year, helping the economy to grow faster and create jobs, President Luiz Inacio Lula da Silva said on Monday.

Analysts said the government would have to cut its investments by half this year after the Senate voted down a bill worth 38 billion reais (US$21.5 billion) in tax revenue.

But Lula said he was optimistic that infrastructure projects would come off the drawing board in coming weeks.

"There is a lot of investment about to happen ... between February, March and April almost all these projects will start generating jobs," Lula said on his weekly radio address.

The government launched a major investment plan in January to remove bottlenecks and modernise infrastructure.

Some government economists expect investments of 13 billion reais in infrastructure to generate 2 million new jobs.

Capital investment is expected to grow by 14 per cent this year, the fastest rate in at least a decade, according to the National Industry Confederation.

International competitiveness

Business leaders have long complained that potholed roads, overburdened port facilities and insufficient railroads were un-dermining Brazil's international competitiveness.

"We will have a 2008 that is better than 2007, with more jobs and more economic growth," Lula said.

Independent economists expect the economy grew by 5.1 per cent in 2007 and will grow by 4.5 per cent this year.

Lula began his second four-year mandate in January and has repeatedly said he will not stand for a third consecutive term.

- Reuters