Brasília – The Brazilian Central Bank has revised its economic growth estimate for this year downwards. The growth projection for the Gross Domestic Product (GDP), i.e. the sum of all goods and services produced in the country, was lowered from 3.5% to 2.5%. The figure was culled from the Inflation Report issued by the bank this Thursday (28th).
According to the report, “the new estimate incorporates 2012 first quarter results, preliminary second quarter figures during which activity has picked up very gradually, and the updated macroeconomic scenario for the second half of the year.”
According to the bank, the rate of growth was “modest” in the first quarter, in spite of the “favourable labour market performance” and family consumption. The institution has also emphasized “the negative contribution of the agricultural sector to economic growth in the beginning of 2012, prompted by significant crop failure in soy, rice and tobacco.”
To the Central Bank, the resumption of economic activity, which should increase in the second half, will be favoured by the belated and cumulative effects of the lowered benchmark interest rate (Selic) and the impact of the government’s recent stimulus measures to industry and consumption.
The Central Bank’s estimate is lower than that of Finance minister Guido Mantega, who said last Wednesday (27th) that he expects the GDP to grow above 2.5% this year.
*Translated by Gabriel Pomerancblum
