Brazil Central Bank expects 3.1% growth

Written By Unknown on Kamis, 28 Maret 2013 | 23.44

BRAZIL'S Central Bank says it expects the economy to grow 3.1 per cent this year, up from just 0.9 per cent in 2012, with inflation of 5.7 per cent.

In its quarterly report, the bank said inflation is forecast to be 5.3 per cent in 2014 - above the centre of the official target range, which is 4.5 per cent, but below the upper limit of 6.5 per cent.

In its previous report, the bank forecast consumer prices would rise 4.8 per cent this year and 4.9 per cent in 2014.

Meanwhile, President Dilma Rousseff sparked controversy on Wednesday when she said from South Africa she did not agree with an inflation-fighting policy that curbs economic growth.

Financial markets interpreted this as a sign of a wavering commitment to controlling inflation. But Rousseff, who was attending a summit of five emerging powers in Durban, insisted this was not the case.

The Central Bank on Thursday stressed it was determined to rein in inflation, warning that "high inflation rates reduce the growth potential of the economy and job creation".

It said the pace of economic activity gained momentum in the fourth quarter of 2012 and that consumer demand would remain strong in the coming months in reaction to the government's tax incentives, interest rate cuts and measures to boost consumption and production.


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