Brazil's Malan Sees Economy Growing Around 4.2%

By BridgeNews Brazilian Finance Minister Pedro Malan said the Brazilian economy is likely to grow by "around 4.2%" this year, slightly below the government's official forecast of about 4.5%. While noting that Brazil was not greatly exposed to the slowdown in the U.S. economy, Malan said it is bound to be affected -- like all other countries in the world. Speaking at a conference in London on South American integration, Malan said the countries most likely to suffer were those sending a large proportion of their total exports to the U.S., or those where exports were a high percentage of gross domestic product. This, he said, was "not the case" for Brazil, where around 22% of exports go to the U.S. and where international trade accounts for just over 10% of GDP. Malan declined to say whether the Brazilian central bank might have to raise interest rates in response to the crisis in confidence in emerging markets. However, he did note that the central bank had a broad inflation target of 4.0%, plus or minus 2 percentage points, and that this was intentionally shaped to ensure it had "time and space" to allow for temporary factors. Malan expressed confidence that Brazil would meet its 4.0% inflation target this year.

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