Inflation will slow to 4.8 percent in 2013 under the reference scenario in which the target lending rate holds steady, compared with a 4.9 percent forecast in the September report, the central bank said today. It cut the 2012 growth forecast to 1 percent from 1.6 percent in its September quarterly report.
Finance Minister Guido Mantega told reporters in Brasilia yesterday that Brazil will “certainly” raise gasoline prices in 2013 and state-controlled Petroleo Brasileiro SA will announce the increase at the right time. Mantega is the company’s chairman.
“If we throw gas price hikes into the central bank’s projection, we would have 2013 inflation near 5.5 percent,” Fernando Genta, the chief economist at MCM Consultores in Sao Paulo, said in a phone interview.
Policy makers left the target lending rate at a record low 7.25 percent last month following 10 straight reductions. Traders use interest-rate swaps to bet on the direction of borrowing costs.
Brazil’s annual rate of consumer price increases as measured by the benchmark IPCA index has exceeded the 4.5 percent midpoint of the central bank’s target range for 27 consecutive months. Annual inflation unexpectedly accelerated to 5.53 percent in November from 5.45 percent the month before, the statistics agency reported Dec. 7.
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