Brazilian industrial output rose sharply in April, the government announced Wednesday, further underscoring recent evidence that the economy is growing rapidly after its worst recession in a decade last year.

Output rose nearly 7 percent in April from the same month a year ago, the Brazilian Census Bureau said. It was the second straight month of strong year-on-year improvement. Output rose 12 percent in March from the same month in 2003.

Brazil's economy plunged into recession in 2003, with gross domestic product shrinking by 0.2 percent. However, the economy showed signs of bouncing back during the first quarter of 2004, when GDP rose 2.7 percent compared to the first quarter of 2003.

Other recent signs of improvement include rising motor vehicle production, which increased by a stunning 28 percent in April, against April of 2003.

Another important indicator, according to the census bureau, is capital goods, which showed a production rise of 22 percent in April from the same month a year ago. Investment in capital goods - the machinery and equipment used to manufacture consumer products - is considered a sign of rising business confidence 

In a speech Tuesday, Finance Minister Antonio Palocci predicted economic growth this year of at least 3.5 percent.

He also hinted that the government may soon lower the base interest rate, currently 16 percent. Lower interest rates would invite more business investments.

Palocci said that inflation, now riding at just above 5 percent, has been tamed. Inflation in 2003 was more than 9 percent.