By Ben Tavener, Senior Contributing Reporter

SÃO PAULO, BRAZIL – Market growth forecasts for Brazil’s GDP (gross domestic product) in 2012 have been cut dramatically for the fourth time in as many weeks, from last week’s prediction of 1.27 percent to 1.03 percent, according to the latest Focus survey, released by the Banco Central (Central Bank). A month ago the prediction stood at 1.54 percent, highlighting the market’s dwindling hopes for growth this year.

President of Brazil Central Bank, Banco Central, Alexandre Tombini, Brazil News
The President of Brazil’s Central Bank, Alexandre Tombini, reiterated his position that the SELIC should be kept steady, photo by Marcelo Camargo/ABr.

The market growth forecast for 2013 has also been revised down to 3.5 percent, from 3.7 percent. The government’s forecasts remain considerably higher.

The survey also showed market analysts expected an increase in the predicted rate of inflation for this year (5.58 percent), with no change for the 2013 forecast (5.4 percent).

The figures also showed that the expectation that Brazil’s key interest rate, the SELIC, would stay at its current level, 7.25 percent, throughout 2013 after the cycle of cuts seen since June 2011, when it was at 12.25 percent.

The forecasts come after months of disappointing results from the sluggish Brazilian economy, including figures from the third quarter of 2012, which showed a 0.6 percent increase in GDP – half of the 1.2 percent expected.

Despite the news, Finance Minister Guido Mantega has insisted on many occasions that he believes 2013 will see growth of four percent or more.

Brazil is implementing a series of billion-real investment programs with a view to improve the country’s overstretched, aging infrastructure – including a recent announcement of R$54.2 billion of investment for Brazil’s ports – to boost the economy.

Read more (in Portuguese)

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