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Brazil says 3rd quarter GDP to beat expectations
October 4, 2013, 9:50 am


Second quarter GDP growth was strong and expanded 1.5 per cent [Xinhua]

Brazil’s Central Bank President Alexandre Tombini said on Thursday in London that the Latin American country’s third quarter GDP growth would not be as low as previously expected.

“We might have third quarter of accommodation, this is expected by market participants, but more benign than people were expecting,” said Tombini.

Second quarter GDP growth was strong and expanded 1.5 per cent over the previous quarter.

The central bank president added that Brazil’s inflation rate was “under control” and slowly decreasing towards the 4.5 per cent target set for 2013.

The accumulated inflation rate from January to August stood at 3.43 per cent.

Tombini also downplayed credit rating agency Moody’s decision to lower the outlook for Brazil’s government bond rating.

He stressed the fact that Moody’s affirmed the country’s Baa2 rating and continued to grant Brazil an investment grade.

Moody’s lowered Brazil’s economic outlook from positive to stable, citing deteriorating key credit metrics, especially its government debt-to-GDP ratio and investment-to-GDP ratio, which were weaker than those of other Baa2 government bonds.

“Key credit metrics are deteriorating, especially Brazil’s government debt-to-GDP and the investment-to-GDP ratios,” said the agency.

Moody’s has also said that the economy is undergoing an extended low-growth period, with GDP growth expected at around two per cent this year.

The central banker said Brazil was ready to deal with any consequences of the potential worldwide fallout of fiscal woes in the United States.

A top International Monetary Fund (IMF) official has slammed reports of an economic wane in Brazil, saying the “economy is solid”.

“Brazil went through a period of great success…Now there is a more negative assessment that is going to the opposite extreme,” said Paulo Nogueira Batista, the IMF’s Executive Director for Brazil.

Batista said the economy is showing signs of recovery and recent speculation about Brazil’s economic crisis is exaggerated.

Data made available by a new report released on Tuesday by Brazil’s Institute of Applied Economic Research (IPEA) says Brazil has lifted 3.5 million people out of poverty and more than a million out of extreme poverty in 2012.

Brazil is the world’s top producer of coffee and sugar and one of the biggest producers of meat, soybeans and iron ore.

Source: Agencies