Brazil has ended a dismal year for its economy on a high note, with news that its export industries have turned in their best performance in history and produced the highest trade surplus for almost a decade.

According to the ministry of development, industry and foreign trade, the surplus for 2002 - with two days left in the year - was $13.09bn (�8.17bn), the best performance since 1993 and more than five times the figure for 2001.

Exports totalled $60.14bn, the highest figure on record.

But the sharply improved performance on paper came partly because of the 34% slump in 2002 of the real, Brazil's currency, rendering exports much cheaper to their overseas buyers.

The currency's fall came as the main stock market, the Bovespa in Sao Paulo, marked the end of the trading year on a 12-month fall of 17%, reflecting investor unease at the prospect of leftwing president-elect Luiz Inacio Lula da Silva.

Balancing act

Lula, who assumes the presidency on New Year's Day at a ceremony in the capital Brasilia, still has plenty of economic problems on his hands.

In exchange for a $30bn loan package desperately needed to keep $260bn in debt under control, he has promised the International Monetary Fund he will keep a 3.75% budget surplus, among other strictures.

Meanwhile, his army of supporters will remember the promises the former steelworker and his Workers' Party (PT) made in the run-up to the December election, to correct some of Brazil's vast inequalities and stamp down on rampant corruption.

At the same time, he has to contend with inflation which the Central Bank says will be 9.5% by the end of 2003, after 2002's double-digit inflation caused by currency-fuelled price rises.

The central bank raised interest rates for the third time in two and a half months earlier this month in an effort to quell inflation, lifting a key overnight rate by three percentage points to 25%, its highest level since April 1999.

That will make servicing Brazil's large domestic debts more difficult, although Lula's life has been made slightly easier by a lower-than-expected current account deficit of $7.5bn thanks to the high trade surplus.