Central Bank chief : Brazil on track for 4% growth

Brazil is on track to post around four percent growth by year's end, with inflation expected to be around 4.5 percent, according to Central Bank chief Alexandre Tombini. Despite a "typical cyclical downturn" and the global slowdown, "Most of us expect the (Brazilian) economy to pick up speed in the second half (of this year). There are signs of strong growth in the third quarter," he said in a conference call with the international press on Monday. The world's sixth largest economy has been experiencing anemic growth since late last year due to the eurozone debt crisis and the sluggish US economy. Last week, the Brazilian government said it was cutting its growth forecast for this year from 4.5 percent to three percent due to the impact of the global slowdown. But Tombini said the easing of the Bank's monetary policy -- with a base rate now down to a record-low eight percent from 12.5 percent in August -- coupled with the government's recent stimulus measures should boost growth to around 4 percent by year's end. "Brazil has the capacity to deliver faster growth, 4 percent or slightly higher, on an annualized basis, by the end of the year," he added. Last week, the government cut its economic growth forecast for this year from 4.5 percent to three percent due to the impact of the global slowdown. The figure was still higher than analysts' expectations of 2.05 percent. Last year, the world's sixth largest economy grew just 2.7 percent after a strong 7.5 percent in 2010. Tombini also expressed confidence that the country is "on track to continue the convergence toward the center of the inflation target" of around 4.5 percent, despite a spike in consumer prices, particularly food prices, in mid-July. "The global environment is very fluid. So there is a high degree of uncertainty," said Tombini, who however insisted that the Bank's baseline was an inflation rate of 4.9 percent for 2013. The Central Bank governor also noted that over the past 12 months, nearly 1.2 million jobs have been created. Earlier Monday, the labor ministry announced that the number of formal jobs created in the first half of 2012 totaled 1.05 million, down from the 1.41 million created during the first six months of 2011. Still, the jobless rate stood at six percent, its lowest level in the past 10 years, largely due to strong service sector employment, it added. With a population of 191 million, Brazil has an active workforce of 100 million people, including 54 percent who until 2009 had a formal job, according to the International Labor Organization.