Meirelles Says He's `Comfortable' With Slower Pace of Brazil GDP Growth
Brazilian central bank President Henrique Meirelles said he’s “comfortable” with the current pace of economic growth, adding that expansion will slow to a level consistent with long-term equilibrium.
Meirelles said gross domestic product will expand an average 0.7 percent over the next two quarters, after the national statistics agency today said it rose 1.2 percent in the second quarter. Economists surveyed by Bloomberg expected growth to slow to 0.7 percent in the second quarter from the first three months of 2010, according to the median of 41 forecasts.
“The central bank is comfortable with this growth, which is absolutely in line with predictions,” Meirelles told reporters today in Brasilia. “We expect, looking ahead, moderate growth in the third and fourth quarters, leading to a level of economic growth around its long-term equilibrium rate.”
On an annual basis, GDP expanded 8.8 percent in the second quarter, pushed by a 26.5 percent jump in investment that was the biggest on record, the statistics agency said.
Today’s stronger-than-expected expansion is reinforcing market bets that “the central bank will be forced to resume tightening right after the elections, or in the first quarter of 2011,” said Zeina Latif, senior economist for Latin America at RBS Securities Inc. in Sao Paulo.
Yields on interest rate futures rose across the board. The yield on the contract due in January 2012, the most traded on the Sao Paulo BM&F Futures Exchange, jumped six basis points to 11.37 percent at 3:05 p.m. New York time.
Meirelles reiterated the central bank’s forecast that Latin America’s biggest economy will grow 7.3 percent this year.
To contact the reporters on this story: Matthew Bristow in Brasilia at mbristow5@bloomberg.net; Andre Soliani in Brasilia at asoliani@bloomberg.net
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