Brazil economy grew 2.79 per cent in 2011, Central Bank says

Feb 16, 2012, 15:52 GMT

Brasilia - The Brazilian economy grew by 2.79 per cent last year, the Central Bank said on Thursday, releasing preliminary figures based on the performance of Brazil's Index of Economic Activity (IBC-Br).

Brazilian Finance Minister Guido Mantega said, however, that this only provides an estimate of gross domestic product (GDP) growth. The official figure is set to be made public next month by the state Brazilian Institute of Geography and Statistics (IBGE).

'GDP (growth) will be around 3 per cent, a little bit more or less,' Mantega said.

Brazil's GDP, the world's seventh-largest, grew by 7.5 per cent in 2010. The country is suffering from effects of the eurozone debt crisis as well as the impact of government measures to contain inflation, including spending cuts and credit restrictions.

Mantega said the government had paved the way for more significant growth this year.

'This GDP is already in the past, and we are en route to greater growth in 2012,' he said. 'Inflation is falling, which allows for a more flexible (interest rate) policy.'

On Wednesday, the government of Brazilian President Dilma Rousseff announced a 32-billion-dollar budget cut which is not expected to affect social programmes or investment in infrastructure.