Brazil Growth to Accelerate This Year, Tombini Tells Newspaper

Brazil’s economic growth will accelerate this year and the country will start 2013 “at a faster speed,” central bank President Alexandre Tombini said in an interview with the newspaper Correio Braziliense.

“There are factors that will support demand this year, such as a strong labor market and wage gains,” Tombini told the newspaper.

Still, maintaining business and consumer confidence is important to keep contagion from the global economic slowdown and the financial crisis in Europe from spreading, he said. Brazil is prepared to react to any adverse effects of the crisis on local markets, he added.

Tombini said the decision last week by Brazil’s finance ministry to begin unwinding capital controls “came at the right moment” and reflects the worsening of financing conditions on international markets.

Brazil exempted foreign loans with a maturity of more than two years from a 6 percent tax to help companies and banks roll over foreign currency-denominated debt. The tax was one of a series of measures taken during the past 19 months to weaken the real and protect exporters from what President Dilma Rousseff called a “monetary tsunami” unleashed by developed nations seeking to devalue their currencies.

Tombini said no more adjustments are needed on the foreign- exchange market to balance the system, though the central bank will continue to monitor the currency.

To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net

To contact the editor responsible for this story: Sylvia Wier in New York at swier@bloomberg.net