Brazil Central Bank cuts GDP growth forecast

Brazil's Central Bank on Thursday cut its GDP growth forecast for 2012 from 1.6 percent to 1 per cent, confirming a marked slowdown in Latin America's biggest economy. In September, the Bank had already revised its forecast downward from 2.5 percent to 1.6 percent. Thursday, the bank also revised its inflation estimate for 2012 to 5.7 percent, up from 5.2 percent. The new projection is well above the official target of 4.5 percent. Market analysts have been predicting 1.5 percent GDP growth for Brazil this year, a projection similar to one by the International Monetary Fund in October. The IMF also expects Brazil to fare worse than its partners in the BRICS bloc of emerging powers, predicting 7.8 percent growth for China, 4.9 percent for India, 3.7 percent for Russia and 2.6 percent for South Africa. Brazil's economy grew just 0.6 percent in the third quarter of 2012 compared with the previous three months, signaling a weaker than anticipated recovery, the Brazilian statistics office said late last month. The economy lost steam last year due to the global slowdown, with GDP growth at 2.7 percent, down from a sizzling 7.5 percent in 2010.