Wed, Jul 25, 2012 - Page 15 News List

Brazil on track for 4% growth: central bank


Brazil is on track to post about 4 percent growth by year’s end, with inflation expected to be about 4.5 percent, Brazilian Central Bank Governor Alexandre Tombini said late on Monday.

Despite a “typical cyclical downturn” and the global slowdown, “most of us expect the [Brazilian] economy to pick up speed in the second half [of this year]. There are signs of strong growth in the third quarter,” he said in a conference call with the international press.

The world’s sixth-largest economy has been experiencing anemic growth since late last year because of the eurozone debt crisis and the sluggish US economy.

Last week, the Brazilian government said it was cutting its growth forecast for this year from 4.5 percent to three percent because of the impact of the global slowdown.

However, Tombini said the easing of the bank’s monetary policy — with a base rate now down to a record-low 8 percent from 12.5 percent in August — coupled with the government’s recent stimulus measures should boost growth to about 4 percent by year’s end.

Last week, the government cut its economic growth forecast for this year from 4.5 percent to 3 percent, because of the impact of the global slowdown.

The figure was still higher than analysts’ expectations of 2.05 percent.

Last year, the world’s sixth-largest economy grew just 2.7 percent after a strong 7.5 percent in 2010.

Tombini also expressed confidence that the country is “on track to continue the convergence toward the center of the inflation target” of about 4.5 percent, despite a spike in consumer prices, particularly food prices, in the middle of this month.

“The global environment is very fluid. So there is a high degree of uncertainty,” said Tombini, who however insisted that the bank’s baseline was an inflation rate of 4.9 percent for next year.

The central bank governor also noted that over the past 12 months, nearly 1.2 million jobs have been created.

Earlier on Monday, the labor ministry announced that the number of formal jobs created in the first half of the year totaled 1.05 million, down from the 1.41 million created during the first six months of last year.

Still, the jobless rate stood at 6 percent, its lowest level in the past 10 years, largely because of strong service-sector employment, it added.

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