RIO DE JANEIRO--Brazil's pace of growth eased from the beginning of this year, an indication that interest rate hikes and tax cuts expire work its way through the broader economy.
The latest data released Thursday the Central Bank which is reinforced to tame inflation efforts provide some relief. In addition to the intoxicating rates of economic expansion which has years inflation in Brazil far beyond the official goal, many economists do higher interest rates in Latin America's largest economy expected accelerates been.
Brazil's gross domestic product expanded 6.7% one year earlier in the third quarter, down from a glowing 9.2% in the second quarter. Quarter growth was a moderate 0.5% last quarter.
Henrique Meirelles, who will end his term as Brazil's longest-serving Federal Reserve Chairman at the end of the month, the growth rate said on Thursday in the third quarter confirmed ", the Brazilian economy move in direction a trajectory is long-term equilibrium."
But inflation data from earlier this week still showed that consumer prices in Brazil at 5.63%, well above the Government official goal of 4.5%--although within a tolerance band of plus or minus two percentage points grew. Finance Minister Guido Mantega, saying inflation Meanwhile until end of this year between 5.2 and 5.3% expected.
Despite inflationary pressure the Brazilian Central Bank decided the benchmark Selic base rate. End Wednesday hold steady 10.75%. While the Bank mentioned a "less favourable Outlook" for inflation, I said, more time is necessary to evaluate measures last week, had implemented it credit growth.
Some economists suggested that the sound of the Central Bank policy statement could indicate that the Bank takes place a wait-and-see approach to inflation, betting, that seasonal factors passed inflation. This could mean, March is an earlier than January for any interest rate increase.
What is at stake is the delicate balance of the Central Bank in its fight against inflation and President Dilma Rousseff of publicly stated desire to see lower interest rates must strike. Your request could then get the Central Bank in the control of inflation by any means other than raising interest rates should be successful woman Rousseff.
But the devil is in the details when Central Bank policy statements, according to economists to HSBC decryption. The Central Bank said it would monitor "careful" economy, which implies that "we are again close to see interest rate increases based on past history," said HSBC. The company expects to a half percentage points in January.
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