Brasília – The Brazilian Ministry of Finance has revised its Gross Domestic Product (GDP) growth projection down to 2% for this year. Thus far, the federal government was working with a 3% rate for 2012. The financial market had been working with the lower rate since July.
This Thursday (13th), upon announcing new economic stimulus measures, the minister Guido Mantega admitted that the economy should not grow above 2% in 2012. The new rate is significantly lower than the 4%-plus growth projected early this year by the government. Financial market economists are forecasting a 1.6% GDP growth rate.
When inquired about the ongoing price hike, Mantega maintained an optimistic outlook. “The reduction of interest rates lowers the financial cost, and ultimately drives prices down. The inflation is under control. We have had a supply shock […]. There is no inflationary pressure in the country other than the supply shock-induced type. Through all of these measures, we will achieve a well-behaved inflation rate in Brazil in 2013,” he guaranteed.
*Translated by Gabriel Pomerancblum
