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Brazil GDP growth view cut for 5th straight week
Source: Bloomberg News |
September 4, 2012, Tuesday
|
Print Edition
Print Edition
ANALYSTS covering Brazil's economy have cut their 2012 economic growth forecast for the fifth week in a row, strengthening expectations that the central bank will cut interest rates once more this year.
Gross domestic product will expand 1.64 percent in 2012, according to the median estimate in a central bank survey of about 100 analysts published yesterday, down from the previous estimate of 1.73 percent. The economy will grow 4 percent in 2013, analysts estimated, flat from the previous survey.
Since August last year, the administration of Brazilian President Dilma Rousseff has cut the benchmark interest rate more than any other G20 nation to record lows, encouraged commercial banks to lift lending and cut taxes on autos and consumer goods to revive growth. The stimulus measures have taken time to have an impact on economic growth, which missed economists' forecasts in the second quarter as output fell 2.5 percent as manufacturing and construction dropped.
"There are several factors affecting the Brazilian economy, such as the global economic crisis and the competitiveness of local industry," said Roberto Padovani, chief economist at Votorantim Ctvm Ltda. "Those factors are delaying an increase in economic activity."
The survey was the first since policymakers cut the key interest rate by 50 basis points to 7.5 percent last Wednesday.
Analysts raised their forecasts for 2012 and 2013 inflation to 5.2 percent and 5.51 percent respectively, from 5.19 percent and 5.5 percent. It was the eighth straight increase in the 2012 estimate. The gain comes after annual inflation quickened for a second month in mid-August to 5.37 percent, as bad weather hurt crops in the US and Brazil and pushed up food prices.
Brazil's central bank expects the economy to grow 2.5 percent this year, down from 2.7 percent in 2011 and 7.5 percent in 2010.
Gross domestic product will expand 1.64 percent in 2012, according to the median estimate in a central bank survey of about 100 analysts published yesterday, down from the previous estimate of 1.73 percent. The economy will grow 4 percent in 2013, analysts estimated, flat from the previous survey.
Since August last year, the administration of Brazilian President Dilma Rousseff has cut the benchmark interest rate more than any other G20 nation to record lows, encouraged commercial banks to lift lending and cut taxes on autos and consumer goods to revive growth. The stimulus measures have taken time to have an impact on economic growth, which missed economists' forecasts in the second quarter as output fell 2.5 percent as manufacturing and construction dropped.
"There are several factors affecting the Brazilian economy, such as the global economic crisis and the competitiveness of local industry," said Roberto Padovani, chief economist at Votorantim Ctvm Ltda. "Those factors are delaying an increase in economic activity."
The survey was the first since policymakers cut the key interest rate by 50 basis points to 7.5 percent last Wednesday.
Analysts raised their forecasts for 2012 and 2013 inflation to 5.2 percent and 5.51 percent respectively, from 5.19 percent and 5.5 percent. It was the eighth straight increase in the 2012 estimate. The gain comes after annual inflation quickened for a second month in mid-August to 5.37 percent, as bad weather hurt crops in the US and Brazil and pushed up food prices.
Brazil's central bank expects the economy to grow 2.5 percent this year, down from 2.7 percent in 2011 and 7.5 percent in 2010.
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