President Luiz Inacio Lula da Silva said Brazil would be the world’s fifth biggest economy by 2016, as he laid the cornerstone of a new Fiat factory.

“Fiat was right to set up in northeastern Brazil, and if it were up to me, whether I am president or not, other companies would set up in other states” in the region, Lula said Pernambuco state.

“Brazil will be the fifth largest economy in the world before the Olympic Games” to be held in Rio De Janeiro in 2016, he added.

The Italian auto group said earlier this month it would invest €1.3 billion in the new plant.

The investment is part of the company’s 2011-2014 strategic plan, which calls for expenditure of a total of €4.4 billion in Brazil, where it has been the country’s leading automaker for the last nine years.

The new plant will churn out around 200,000 vehicles a year and will provide jobs for 3,500 people, Fiat said.

“Brazil, where by 2014 we want to be selling more than a million vehicles a year, is a strategic zone in our expansion plans,” Fiat chief executive Sergio Marchionne said earlier this month.

Lula has hailed his eight-year record leading Latin America’s biggest nation as he prepares to hand the reins of power to anointed successor Dilma Rousseff, who was elected president in October and will assume office January 1.

The 65-year-old former metalworker and trade union leader leaves office with a popularity rating above 80 percent and a claim to having reduced social inequalities and presided over a long period of prosperity.