Brazil industry cautiously optimistic on growth

The Brazilian industrial federation on Wednesday upped its 2013 growth forecast to 1.4 percent from 1.0 percent and its GDP growth projection from 2.0 to 2.4 percent. But, despite the better data, the National Confederation of Industry (CNI) urged caution. "The improved economic outlook is no guarantee of a strong growth rate," it said. "This year, investment will play a larger role than household spending in terms of GDP growth," the statement added, forecasting an 8.0 percent rise in investment but only 1.9 percent in consumer spending. CNI meanwhile projected that the year-end jobless rate would stand at 5.1 percent, trimming its initial forecast of 5.3 percent. It saw inflation closing the year at 5.8 percent, down from a June estimate of six percent but still above the government target of 4.5 percent. With inflation still showing signs of upward pressure, the CNI expects to the Central Bank to raise its current base rate of 9.0 percent to 9.75 percent by year's end. Brazilian Finance Minister Guido Mantega believes the economy will grow 2.5 percent this year and four percent in 2014, when the Latin American powerhouse expects a boost from hosting the World Cup. Last year, GDP growth came in at a paltry 0.9 percent, after 2.7 percent in 2011 and a sizzling 7.5 percent in 2010.